Dampak utang pemerintah terhadap pertumbuhan ekonomi negara-negara di Kawasan Uni Eropa dan ASEAN+6

Abstract

Economic conditions in the countries of the European Union is facing a crisis as a result of heavy pressure in the form of a relatively widening budget deficit and rising debt burden. The impact of government debt on economic growth become a problem that is interesting to study, especially after the European economic crisis. The ratio of government debt in the countries of the European Union and ASEAN +6 showed a pattern of escalating and it is very harmful to the economy, especially for countries in ASEAN +6. Based on the above issues, this study aims to analyze: the development of government debt in the countries of the European Union and ASEAN +6, the impact of government debt on economic growth, the differences of government debt impact on economic growth for each region, the path of government debt impact on economic growth in the countries of the European Union and ASEAN +6. This study covers 19 countries in the European Union and the 11 countries in ASEAN +6 with the observation period of 26 years (from 1985 to 2010). The study uses a static and dynamic panel data analysis. The model used in this study is based on the model study as outlined by Checherita-Westphal and Rother (2012). Analyzing result for economic growth shows that the Fixed Effect Model (FEM) is the best estimation model than the model of pooled least squares (POLS) and Random Effect Model (REM). The results shows a nonlinear negative relationship between government debt and economic growth. This implies that the general government debt ratio above the current limit value of 60 percent, debt has a negative impacts on economic growth. Analysis using regional dummy showed that between the EU and ASEAN +6 there are not differences in the impact of debt. Dynamic panel data analysis results show that the best estimation model for saving and investment is FEM and the best estimation model for TFP growth is Sys-GMM. The results shows that there has not been enough evidence to suggest that the negative impact of debt on economic growth is transmitted through savings, investment and TFP growth. Based on the results of research, policy implications that can be suggested including negative relationship between debt and economic growth so the government should be more careful in making new loans, the negative impact of government debt when the threshold above 60 percent indicates that the countries that have a debt ratio above the threshold should control its debt ratio not exceed than 60 percent.