%0 Journal Article
%A Gómez-Puig, Marta
%A Sosvilla Rivero, Simón Javier
%T The causal relationship between debt and growth in EMU countries
%D 2015
%@ 0161-8938
%U https://hdl.handle.net/20.500.14352/34187
%X New evidence is presented on the possible existence of bi-directional causal relationships between public debt and economic growth in both central and peripheral countries of the European Economic and Monetary Union. We test for heterogeneity in the bi-directional Granger-causality across both time and space during the period between 1980 and 2013. The results suggest evidence of a “diabolic loop” between low economic growth and high public debt levels in Spain after 2009. For Belgium, Greece, Italy and the Netherlands debt has a negative effect over growth from an endogenously determined breakpoint and above a debt threshold ranging from 56% to 103% depending on the country.
%~