| Abstract [eng] |
The main purpose of this master thesis is to analyze the relationship between public debt and economic growth in different countries and to identify main economic factors which can be influenced by public debt growth. The work consists of three main parts: the analysis of scientific literature, the research methodology and research results, conclusions and recommendations. Literature analysis reviews the concept of public debt, its structure, relation between economic growth and public debt, the main factors which has influence to public debt. After the literature analysis was done, research methods and indicators were selected. The main purpose of empirical research was to identify how growing public debt can influence country‘s economy and what are the main economic factors which are influenced by it. Six European Countries were selected: Italy, France, Germany, Lithuania, Latvia and Estonia. In total six economic factors were selected: GDP, industrial production index, country‘s budget expenditure, unemployment level, consumer price index and investment share of GDP. Graphic data analysis and regression analysis (linear function and correlation) were applied to get most information from the date. The performed research revealed that almost all chosen economic factors are influenced by government debt in both ways: negatively and positively. Only unemployment rate was found significant in two countries. GDP and consumer price index were strongly influenced by public debt. These factors are one of the mains which describes economic growth so it means that they are very sensible to public debt and it can signalize if debt is getting bigger, the economy is getting down. In countries where the share of government external liabilities accounted for more than GDP, faster GDP growth is needed to reduce the risks of an increase in government external debt. The conclusions and recommendations summarize the main concepts of literature analysis together with results achieved by making an empirical research. The results of this work could be useful for a deeper analysis of the economic processes taking place in the countries of the European Union, in the formation of public debt management measures, for open economies, as well as, in planning response instruments to economy drop during international financial crisis. |
