Institutional Aspects of Economic Growth: Assessing the Significance of Public Debt, Economic Governance and Industrial Competition

Abstract

Institutional aspects of economic growth are critically reviewed with emphasis on the fiscal crisis facing the European Union (EU). In particular the importance of public debt, economic governance, and industrial competition are assessed, as well as the effectiveness of econometric models in forecasting economic growth. Likewise, the debate on whether political institutions cause economic growth, or whether, alternatively, growth and human capital accumulation lead to institutional improvement is discussed. Positive and negative institutional factors on economic growth will also be briefly debated.