There has been a significant examination of debt levels and their impact on economic growth. With the successful reduction of debt in Canada in the 1990s and Greece experiencing crippling debt levels in the 2010s, debt still plays a major role when nations enact financial policies. In this study, I examine the relationship between debt and economic growth by answering two questions; 1. Does high debt impact economic growth? 2. Does austerity really promote growth? By examining panel data from 34 OECD countries over 65 years, I find that high debt does, in fact, reduce economic growth. However, reducing the government deficit levels doesn’t result in larger growth. Overall, it seems that efforts to reduce debt levels will promote growth, but reducing deficit levels isn’t the best tool to do so.
One surprising aspect of developmental economics is that natural resources do not always have the positive impact on economic growth that theory suggests. The natural resource curse explains the phenomenon that countries with a large natural resource abundance grow more slowly than those with few natural resources. Previous empirical studies focus on the effects of natural resources on growth until the early 1990s. This paper expands these studies, finding that the negative relationship between economic growth and natural resources has continued beyond the 1990s into the present. Using both ordinary least squares and instrumental variable analysis, this paper confirms the negative association between natural resources and economic growth.
This paper examines the birth rate’s effect on economic growth focusing especially on China from the year 1979 to the year 2014 since this was the period when the one-child policy was applied. This study uses a panel dataset that contains data of 28 Chinese provinces and uses Fixed Effect and system GMM as the main estimation methods to conduct an empirical analysis. Also, this research uses the rate of people who only have one child as an instrumental variable to control for the endogeneity of the birth rate for the year 2000 to the year 2010. The results suggest that birth rate has no significant effect on the growth of GDP. Although this result is not consistent with the results of some previous research that birth rate has a positive effect on economic growth, it suggests some possible reasons for the introduction of the new two-child policy in December 2015.