AN EMPIRICAL APPROACH OF SOCIAL IMPACT OF DEBT ON ECONOMIC GROWTH. EVIDENCE FROM THE EUROPEAN UNION

摘要

Today's economic reality contains a certain degree of uncertainty that often prevail economic rationality, affecting economic growth. Recent European and political agendas put a robust emphasis on the importance of social dimension of growth and try to shift the focus from economic evidence to social outcomes. The debt is currently a sensitive issue for most European countries and ordinary individuals, thus creating significant imbalances regarding perceived economic wealth and wellbeing at national and individual level. But debt is also associated with fast money and short term prosperity that can engine business and support living, thus economic growth. The paper makes a repositioning evaluation of the social domain into European political agendas, towards a smart, sustainable and inclusive growth for the Europeans. It encompasses an evaluation of the relevance of European growth on its economic development and sustainability. Rebalancing finance and economic priorities with a strong commitment to social priorities is the main reorientation target of the political agenda. There's a growing need for shifting the focus to qualitative facets of growth and European testimonials, for an ascending journey to smart, sustainable and inclusive growth, representing a continuing approach of EU's root ideals. Thus, the paper proposes an analysis of GDP evolution in relation to debt to GDP ratio indicator and social factors, as an alternative impact evaluation played by the social system and debt for a country's performance, representing an alternative way for assessing economic growth in relation to wellbeing. The results show a significant dependence of growth to debt to GDP ratio and social indicators such as population at risk to poverty rate, unemployment rate, life expectancy and expected years of schooling .