Please use this identifier to cite or link to this item: http://hdl.handle.net/1822/36690

TitleCan re-regulation of the financial sector strike back public debt?
Author(s)Agnello, Luca
Sousa, Ricardo M.
KeywordsFinancial re-regulation
Financial liberalisation
Reforms
Reversals
Public debt
Issue date2015
PublisherElsevier
JournalEconomic Modelling
Abstract(s)This paper analyzes the impact of financial sector policy changes on the dynamics of public debt. Using a panel of 89 countries from 1973 to 2005, we find that while the implementation of (large) financial liberalisation policies significantly raises the public debt growth rate, the adoption of financial re-regulation measures leads to a mild reduction of public debt. Looking at the different typologies of financial sector policy changes, we show that stricter banking supervision, privatisations and restrictions to international capital flows contribute to a fast decline of the growth rate of public debt. In contrast, the removal of entry barriers and the elimination of interest rate controls boost public debt growth. Finally, our results confirm that financial re-regulation is more likely to succeed when inflation is high, while large financial liberalisation measures significantly raise public debt when economic growth is low. Our results are robust to various estimation techniques and model specifications and to the inclusion of different control variables.
TypeArticle
URIhttp://hdl.handle.net/1822/36690
DOI10.1016/j.econmod.2015.07.018
ISSN0264-9993
Publisher versionhttp://www.journals.elsevier.com/economic-modelling/
Peer-Reviewedyes
AccessRestricted access (UMinho)
Appears in Collections:NIPE - Artigos em Revistas de Circulação Internacional com Arbitragem Científica

Files in This Item:
File Description SizeFormat 
LA_RMS_20141215 - Manuscript.pdf
  Restricted access
Can Re-Regulation of the Financial Sector Strike Back Public Debt?824,36 kBAdobe PDFView/Open    Request a copy!

Partilhe no FacebookPartilhe no TwitterPartilhe no DeliciousPartilhe no LinkedInPartilhe no DiggAdicionar ao Google BookmarksPartilhe no MySpacePartilhe no Orkut
Exporte no formato BibTex mendeley Exporte no formato Endnote Adicione ao seu ORCID