The Relationship Between Increased Debt Ratio and Economic Growth in the European Union: The Granger Causality Approach

Increased government debt rates in recent years can be easily financed the current global economic environment characterised by liquidity abundance. Nevertheless, ratios represent a potential threat under surface, which could lead to significant macroeconomic problems future. The purpose of paper is contribute debate empirical studies between public and growth, as well external growth. During analyses, relationship variables was examined using panel Granger causality test with Dumitrescu–Hurlin Member States European Union. main findings study are that there unidirectional causal effect is, only impacts on In case growth also effect, but it reverse direction. addition, pre-crisis post-crisis period examined, basis concluded before crisis, nature bidirectional whereas after crisis had an impact economy does not exist.