Public debt

Topics: Economic growth, Macroeconomics, Inflation Pages: 20 (13376 words) Published: October 24, 2014
Investigating the relationship between public debt and economic growth the case of Portugal NAME STUDENT ID DEGREE SUPERVISOR TITLE WORD COUNT DATE CAMPUS. . Investigating the relationship between public debt and economic growth the case of Portugal 11,499 . ABSTRACT The implications of public obligation on economic growth are very important to be researched as background to economic policies of a country. A country partly based on the comprehension of the relationship between public debt and economic growth to identify countries situation and draw specific plan to run a sound public debt policy for economic development. Therefore, a research into factors in which the amount of public debt affects the determinants of economic growth is necessary for a country to find out the situation of public debt and how to maintain its sound level to promote the economy. This research uses regression analysis model to examine the relationship between economic growth and public debt in case of Portugal with respect to factors such as investment and monetary policies. In which, investment is represented by foreign investment and domestic capital meanwhile, monetary policies are indicated by inflation rate. With respect to research methodology, the research conducts literature review regarding both theoretical and empirical background and uses secondary data as data collection method and quantitative method as the research method. The process of data collection is implemented through data gathered from the official resources of WB and OECD including real GDP, public debt, inflow FDI, inflation rate and annual capital growth in Portugal for the period 1992 to 2002. After conducting data analysis and regression analysis, the research findings shows that four variables namely public debt, foreign direct investment, monetary policy and investment have influences on economic growth demonstrated through GDP indicator. In the case of Portugal, public debt and foreign direct investment have positive relationship with GDP, while monetary policy and investment have negative influence in GDP. Among those variables, public debt is the most significant predictor at 32 level of significance. After findings, analysis and discussion, the research also comes to an end with several recommendations for Portugal based on the research findings on the Portugal case as well as some implications for further researches. ACKNOWLEDGEMENT First and foremost, my appreciation goes to all those who offer such a golden opportunity to conduct this graduation paper. I would like to thank () for giving me permission to implement the paper. I owe a debt of gratitude to my supervisor, (), (.). Without her/his enthusiastic guidance, persistent help and valuable encouragement, this paper would not have been possible. Last but not least, I would like to dedicate my concluding words to (..), who delivered priceless encouragement during the time I carried out this study. TABLE OF CONTENT TOC o 1-4 h z u HYPERLINK l _Toc396932549 ABSTRACT PAGEREF _Toc396932549 h i HYPERLINK l _Toc396932550 ACKNOWLEDGEMENT PAGEREF _Toc396932550 h ii HYPERLINK l _Toc396932551 TABLE OF CONTENT PAGEREF _Toc396932551 h iii HYPERLINK l _Toc396932552 LIST OF FIGURES AND TABLES PAGEREF _Toc396932552 h v HYPERLINK l _Toc396932553 CHAPTER I. INTRODUCTION PAGEREF _Toc396932553 h 1 HYPERLINK l _Toc396932554 I.1. Theoretical background PAGEREF _Toc396932554 h 1 HYPERLINK l _Toc396932555 I.2. Contextual background PAGEREF _Toc396932555 h 1 HYPERLINK l _Toc396932556 I.3. Problem statement PAGEREF _Toc396932556 h 3 HYPERLINK l _Toc396932557 I.4. Research objectives PAGEREF _Toc396932557 h 3 HYPERLINK l _Toc396932558 I.5. Structure of the research PAGEREF _Toc396932558 h 4 HYPERLINK l _Toc396932559 CHAPTER II. LITERATURE REVIEW PAGEREF _Toc396932559 h 6 HYPERLINK l _Toc396932560 II.1. Introduction PAGEREF _Toc396932560 h 6 HYPERLINK l _Toc396932561 II.2. Theoretical literatures...
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