Abstract: This paper offers a straightforward and descriptive contribution to the recent and busy debate on fiscal discipline made popular by a seminal paper by Reinhart and Rogoff (2010) after policymakers have sought foundation and justification of a policy known as austerity measures following the recent sovereign debt crisis. We revisit the debate on whether or not higher debt levels impede growth rates and contribute by offering a time series perspective of a corrected data set and also a more recent and higher frequency source. We find that with further hindsight and from a time series perspective there is no support for the view that higher levels of debt cause reductions in economic activity.
Abstract: To ensure the safety and soundness of the global financial system as well as individual financial institutions and to reduce systemic risk, numerous policy measures and regulatory reforms have been brought forward as a reaction to the Global Financial Crisis and the European Sovereign Debt Crisis. Simultaneously, numerous academic works have critically reviewed these developments. Therefore, based on a dataset of 455 papers, this article intends to structure the multitude of publications and provide a comprehensive overview of post-crisis regulatory research publications. Studies can be roughly divided into three overarching clusters: publications identifying causes of the crisis, articles focusing on policy and reform reactions, and literature investigating whether these reforms fit their purpose. A holistic and systematic review allows us to extract relevant recommendations and areas of action to prevent such a crisis in the future.
Abstract: What type of crisis is generated when debt increases? We extend the literature by framework by introducing currency and stock market crises in the analysis. We apply our proposal to the case of Spa...
Cites background from "Revisiting Reinhart & Rogoff after ..."
...Indeed, Amann and Middleditch (2015) show recently that there is no support for the view that higher levels of debt cause reductions in economic activity (they did not include currency and stock market crises either)....
Abstract: This paper revisits the writings of Michal Kalecki which relate to issues of fiscal policy, budget deficits and securing full employment in capitalist economies. It seeks to relate those writings t...
Abstract: This article reviews the most important contributions to literature on "public debt - economic growth" relationship. Most relevant studies are empirical. Some of them are based on causality tests, albeit with no clear conclusion as to what the causes and what the effects are. We also indicate important gaps, which have not been considered and these are either periods of economic crises or "secular stagnation" phenomena. We suggest that policy makers and investors should reconsider not only the so-called 90% "threshold hypothesis" but also the causality itself, because there is no necessary theoretical consensus so far.
Abstract: We use the US data gathered by Reinhart and Rogoff (2010) to assess whether debt affects economic growth differently at different phases of the business cycle. In order to do that, we extend the threshold regression model of Chudik et al. (2017) and propose a new threshold quantile ARDL regression model. Our results show that to stimulate growth policy makers can manage the debt/GDP percentage according to how well the economy is doing. The estimated quantile thresholds (range 31–53 per cent) are larger than the one found by Lee et al. (2017) using median regressions, but still (much) smaller than the 90 per cent of Reinhart and Rogoff. In particular, when the US economy observes growth rates above their median value, that is when a smaller debt-to-GDP threshold affects the performance of the economy. In a steady-state situation, in general, regardless of the position of the business cycle and whether the debt-to-GDP ratio is below or above its threshold effect, less debt as a percentage of GDP boosts the US growth. Remarkably, this effect was always greater before than after World War II. Moreover, the most recent decades have witnessed the negative (positive) effect of more (less) debt when the economy had growth rates at their first quartile (median and third quartile). That is, the US policy makers are advised to reduce the debt-to-GDP ratio during expansions to promote growth.
TL;DR: This book describes ggplot2, a new data visualization package for R that uses the insights from Leland Wilkisons Grammar of Graphics to create a powerful and flexible system for creating data graphics.
Abstract: This book describes ggplot2, a new data visualization package for R that uses the insights from Leland Wilkisons Grammar of Graphics to create a powerful and flexible system for creating data graphics. With ggplot2, its easy to: produce handsome, publication-quality plots, with automatic legends created from the plot specification superpose multiple layers (points, lines, maps, tiles, box plots to name a few) from different data sources, with automatically adjusted common scales add customisable smoothers that use the powerful modelling capabilities of R, such as loess, linear models, generalised additive models and robust regression save any ggplot2 plot (or part thereof) for later modification or reuse create custom themes that capture in-house or journal style requirements, and that can easily be applied to multiple plots approach your graph from a visual perspective, thinking about how each component of the data is represented on the final plot. This book will be useful to everyone who has struggled with displaying their data in an informative and attractive way. You will need some basic knowledge of R (i.e. you should be able to get your data into R), but ggplot2 is a mini-language specifically tailored for producing graphics, and youll learn everything you need in the book. After reading this book youll be able to produce graphics customized precisely for your problems,and youll find it easy to get graphics out of your head and on to the screen or page.
"Revisiting Reinhart & Rogoff after ..." refers methods in this paper
...1All computations were conducted using the statistical software R (R Core Team, 2014) and all data visualisations in this thesis were produced using ‘ggplot2’ by Wickham (2009)....
Abstract: This paper reviews econometric methods for dynamic panel data models, and presents examples that illustrate the use of these procedures The focus is on panels where a large number of individuals or firms are observed for a small number of time periods, typical of applications with microeconomic data The emphasis is on single equation models with autoregressive dynamics and explanatory variables that are not strictly exogenous, and hence on the Generalised Method of Moments estimators that are widely used in this context Two examples using firm-level panels are discussed in detail: a simple autoregressive model for investment rates; and a basic production function
Abstract: We study economic growth and inflation at different levels of government and external debt. Our analysis is based on new data on forty-four countries spanning about two hundred years. The dataset incorporates over 3,700 annual observations covering a wide range of political systems, institutions, exchange rate arrangements, and historic circumstances. Our main findings are: First, the relationship between government debt and real GDP growth is weak for debt/GDP ratios below a threshold of 90 percent of GDP. Above 90 percent, median growth rates fall by one percent, and average growth falls considerably more. We find that the threshold for public debt is similar in advanced and emerging economies. Second, emerging markets face lower thresholds for external debt (public and private)--which is usually denominated in a foreign currency. When external debt reaches 60 percent of GDP, annual growth declines by about two percent; for higher levels, growth rates are roughly cut in half. Third, there is no apparent contemporaneous link between inflation and public debt levels for the advanced countries as a group (some countries, such as the United States, have experienced higher inflation when debt/GDP is high.) The story is entirely different for emerging markets, where inflation rises sharply as debt increases.
Abstract: This paper reviews econometric methods for dynamic panel data models, and presents examples that illustrate the use of these procedures. The focus is on panels where a large number of individuals or firms are observed for a small number of time periods, typical of applications with microeconomic data. The emphasis is on single equation models with autoregressive dynamics and explanatory variables that are not strictly exogenous, and hence on the Generalised Method of Moments estimators that are widely used in this context. Two examples using firm-level panels are discussed in detail: a simple autoregressive model for investment rates; and a basic production function.