Analyzing Macroeconomic Indicators of Economic Growth Using Panel Data

Journal of Finance and Investment Analysis, Vol.2, No.3, 2013, pp 41-53

13 Pages Posted: 14 May 2013 Last revised: 15 Aug 2013

See all articles by Nihat Taş

Nihat Taş

Istanbul University - School of Business, Department of Quantitative Methods

Ali Hepsen

Istanbul University - Faculty of Business Administration, Department of Finance

Emrah Önder

Istanbul University - School of Business - Department of Quantitative Techniques

Date Written: August 15, 2013

Abstract

During last 10 years some EU countries had economical instability. They have short and long term challenges such as unemployment, population ageing, globalization etc. In this study it is aimed to analyze macroeconomic indicators of EU countries’ economic growth using panel data approach. Static linear panel data models were used for determining the effects of independent macro economic variables on gross domestic product (GDP) of EU member countries including Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom; acceding country: Croatia; and candidate countries: Iceland, Serbia and Turkey. While dependent variable of analyze is gross domestic product (volume), the independent variables are current account balance, general government gross debt, general government revenue, general government total expenditure, gross national savings, inflation (average consumer prices), population, total investment, unemployment rate, volume of exports of goods and services, volume of imports of goods and services. The analysis proposed is based on a panel data (cross sectional time series data) approach. The dataset of this research involves 31 EU member and EU candidate countries (cross sectional units). The effects of 11 macroeconomic indicators on gross domestic product volume were examined. The paper also empirically analyzes the negative impacts of global financial crisis (the 2007 U.S. Subprime Financial Crisis) into EU member and candidate countries’ economic growth during the 2002-2012 periods (time series). In this context, the paper explains what a financial crisis is, the factors that promote a financial crisis, and the dynamics of a financial crisis. Thus, the effects of macroeconomic parameters are analyzed using panel data series. The findings of this research are especially useful for EU candidate countries such as Iceland, Serbia and Turkey for developing convenient economical strategies.

Keywords: European Union and Candidate Countries, Macro Economic Parameters, Panel Data Analysis, Gross Domestic Product, Economic Growth

JEL Classification: C53, E00, E27, E29

Suggested Citation

Taş, Nihat and Hepsen, Ali and Önder, Emrah, Analyzing Macroeconomic Indicators of Economic Growth Using Panel Data (August 15, 2013). Journal of Finance and Investment Analysis, Vol.2, No.3, 2013, pp 41-53. Available at SSRN: https://ssrn.com/abstract=2264388 or http://dx.doi.org/10.2139/ssrn.2264388

Nihat Taş (Contact Author)

Istanbul University - School of Business, Department of Quantitative Methods ( email )

Istanbul Universitesi Avcilar Kampusu
Isletme Fakultesi Avcilar
Istanbul, 34322
Turkey

HOME PAGE: http://aves.istanbul.edu.tr/nihattas/yayinlar

Ali Hepsen

Istanbul University - Faculty of Business Administration, Department of Finance ( email )

Istanbul
Turkey

Emrah Önder

Istanbul University - School of Business - Department of Quantitative Techniques ( email )

Istanbul
Turkey

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