Regional Formation and Development Studies

The study presents alternative measures for measuring the welfare of a country in the context of identifying relationships generated by the impact of changes in the income level, measured by gross domestic product (GDP), related to other welfare, measured by the Happy Planet Index (HPI). The analysis was conducted in Romania, during the period from 2012 to 2016. The research methodology involves simple linear regression and welfare descriptive variables such as GDP, GDP/capita, HPI and its subcomponents’ indicators, namely life satisfaction, life expectancy and ecological footprint. Identification of aspects that have an impact on the welfare of citizens allows to compare levels of wellbeing experienced worldwide and to identify the main areas at the national level on which improvements can be made. The results indicate that, although there is no correlation between GDP and HPI, GDP/capita has great influence on both life satisfaction and life expectancy. Also, GDP has influence on the ecological footprint. Given these considerations, the main conclusion of the research is that, although the level of welfare, quantified using GDP, changes positively, this change is due to the increased life expectancy, life satisfaction, reduced ecological footprint rather than to changes in income levels.

The Great Financial Crisis (GFC) of 2008 to 2010 increased the size of the public debt and decreased the fiscal space. The problem stems from the fact that fiscal resources are limited. Many OECD countries had used a substantial part of their limited fiscal space. Researchers suspected that higher levels of public debt in the future could slow down GDP growth. The first attempts to detect the tipping point at which GDP growth stalls or loses steam were made right after the GFC. However, the discussion was left open. The Covid-19 crisis required the further use of unprecedented amounts of fiscal stimulus resources to stabilise the economic situation. The objective of this paper is to establish whether new data of elevated public debt levels in relation to GDP confirms that higher levels of debt to GDP have an impact on future GDP growth and future financial stability. Debt and GDP data from OECD countries for the years 2000 to 2026 was used in order to carry out multilinear regression analysis, establishing the relationship between debt and future GDP growth. The results provide compelling evidence that the accumulation of higher debt levels slows down GDP growth, and require more fiscal resources in the future to stabilise the economic situation, compared with countries with lower accumulated public debt levels. Hence, higher inflation will require even more resources to service the debt.