THE PUBLIC DEBT`S IMPACT ON ECONOMIC GROWTH. EUROPEAN UNION COUNTRIES CASE STUDY
THE PUBLIC DEBT`S IMPACT ON ECONOMIC GROWTH. EUROPEAN UNION COUNTRIES CASE STUDY

Author(s): Alin Vasile Străchinaru
Subject(s): Social Sciences, Economy, Public Administration
Published by: Editura Universităţii »Alexandru Ioan Cuza« din Iaşi
Keywords: economic growth; public debt; multivariate regression
Summary/Abstract: The events dynamics of the recent decades have confirmed an open relationship between economic growth and public debt. If the first represents the central pillar of sustainable development, the debt constitutes, depending on its approach, a destabilizing factor or a motivational one for achieving the objectives. This study aims to capture the significant indicators` influence on the economic growth dynamics, by using a multivariate regression. The data are collected from the official websites of financial institutions (Eurostat, OECD, respectively IMF) and refer to European Union countries. The analyzed period is between 2000 and 2022 (official data), with an annual frequency. The regression results provide real growth prospects that must be taken into account in developing future strategies. Along with prudence and taking responsibility, increased attention to the flexibility concept is required. In particular, these findings emphasize the need to implement both public policies connected to economic reality and financial-monetary instruments that support economic growth. In this sense, the public debt level does not represent an obstacle, but an asset that supports economic growth, sustainable development at the European Union level.

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