Economic Growth Efficiency and Productivity Constrained by Government Debts

This paper analyzes the panel data of 60 countries during the period 1990-2014. It employs non-radial and non-angled slack-based measure (SBM) method to count the economic growth efficiency and inefficiency sources under government debt constraints. The results show that traditional efficiency is usually higher than economic growth efficiency, and the latter can better reflect real economic situation. In addition, debt inefficiency is the main cause of declining economic growth efficiency in all countries, and it has the greatest impact on developing countries. Meanwhile, this paper also adopts the global reference Global-Malmquist-Luenberger (GML) index to measure total factor productivity (TFP) and further decomposes it into technological changes and efficiency changes. It is found that technological progress and efficiency improvement are the main driving forces for enhancing total factor productivity.