Växer pengar på träd?
(2021) NEKH04 20221Department of Economics
- Abstract
- This study examines the relationship between the public debt quota and economic growth while using the Modern Monetary Theory (MMT) as a theoretical base. This is done with a panel data regression using 81 countries over a time period from 1980-2019. MMT emphasises that countries in control of their monetary base, monetarily sovereign countries, can hold a larger public debt without negative effects on economic growth. To test the MMT- hypothesis the sample was divided into two groups based on their monetary regime. An interaction term was then created to analyse the effect public debt had on growth in monetary sovereign countries. The results were insignificant on public debt levels for countries in general and for those with monetary... (More)
- This study examines the relationship between the public debt quota and economic growth while using the Modern Monetary Theory (MMT) as a theoretical base. This is done with a panel data regression using 81 countries over a time period from 1980-2019. MMT emphasises that countries in control of their monetary base, monetarily sovereign countries, can hold a larger public debt without negative effects on economic growth. To test the MMT- hypothesis the sample was divided into two groups based on their monetary regime. An interaction term was then created to analyse the effect public debt had on growth in monetary sovereign countries. The results were insignificant on public debt levels for countries in general and for those with monetary sovereignty. A potential reason for this could be differences in how the debt is being used and whether it finances growth enhancing projects or not. However, the results indicates that MMT is not sufficient to explain how public debt affects economic growth. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9083518
- author
- Sandin, Thea LU
- supervisor
- organization
- course
- NEKH04 20221
- year
- 2021
- type
- M2 - Bachelor Degree
- subject
- keywords
- public debt, sovereign money, Modern Monetary Theory, panel data, economic growth
- language
- Swedish
- id
- 9083518
- date added to LUP
- 2022-10-10 09:17:21
- date last changed
- 2022-10-10 09:17:21
@misc{9083518, abstract = {{This study examines the relationship between the public debt quota and economic growth while using the Modern Monetary Theory (MMT) as a theoretical base. This is done with a panel data regression using 81 countries over a time period from 1980-2019. MMT emphasises that countries in control of their monetary base, monetarily sovereign countries, can hold a larger public debt without negative effects on economic growth. To test the MMT- hypothesis the sample was divided into two groups based on their monetary regime. An interaction term was then created to analyse the effect public debt had on growth in monetary sovereign countries. The results were insignificant on public debt levels for countries in general and for those with monetary sovereignty. A potential reason for this could be differences in how the debt is being used and whether it finances growth enhancing projects or not. However, the results indicates that MMT is not sufficient to explain how public debt affects economic growth.}}, author = {{Sandin, Thea}}, language = {{swe}}, note = {{Student Paper}}, title = {{Växer pengar på träd?}}, year = {{2021}}, }