Analyzing Macroeconomic Indicators of Economic Growth using Panel Data


Journal of Finance and Investment ANALYSIS, vol.2, pp.41-53, 2013 (Peer-Reviewed Journal)


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  findings  of  this
research  are  especially  useful  for  EU  candidate  countries  such  as  Iceland,  Serbia  and
Turkey for developing convenient economical strategies.