Proceedings of the 9th International Academic Conference, Istanbul

PUBLIC DEBT AND GROWTH IN GREECE. AN EMPIRICAL APPROACH.

ANGELOS MARKOU, MARIA KARAMITROU

Abstract:

On this paper is conducted a study on the impact that will have the public debt to the growth rate of Greece for the period 2014-2017. Along with the estimation, in order to be a comprehensive picture of public debt and growth in Greece we proceeded with a presentation of data for the period 1975-2012. The estimations were made, using econometric model for growth designed specifically to describe and estimate the growth rate, for this country. The estimations for public debt were made by using the standard type of debt to GDP ratio. In order to examine whether Greece’s public debt has positive impact or not on its growth, a linear model has been used for this relationship. The results of research showed a further decline of the Greek economy meaning the continuation of country’s recessionary path will and the public debt levels will remain high. Therefore the relationship between public debt and growth will be negative. In the end we make some useful conclusions on Greece’s public debt and growth, presenting reliable solutions in order to be avoided any further downturn of the economy.

Keywords: Public debt, Growth rate, Greece, Public debt crisis

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