Growth in a Time of Austerity: Evidence from the UK

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Abstract

This paper uses an empirical approach to test the specific causal relationship between debt and growth for the case of the UK, in the context of the debate surrounding the use of a policy known as austerity measures. This time series perspective makes use of more recent Granger-causality and co-integration tests that allow for non-stationarity in macroeconomic time series data in the presence of structural breaks. Controlling for exogenous shocks associated with the period around the financial crisis, we find no evidence of a causal relationship between economic growth and public debt for the UK.

Bibliographical metadata

Original languageEnglish
JournalScottish Journal of Political Economy
Early online date20 Apr 2017
DOIs
Publication statusPublished - 2017