A meta-analysis of the relationship between debt and growth
AbstractPurpose – Developing countries tend to be characterised by relatively high levels of indebtedness. The proceeds from debt can potentially have positive effects on growth, if the funds are employed to expand the productive capacity of the nation. The paper aims to investigate whether debt can be used to finance growth. Design/methodology/approach – The paper utilizes meta-analysis approach to address the issue. This approach allows researchers to combine the results from both published and unpublished research to gain insights regarding the directional and statistical significance of the relationship between the two variables. Findings – The results suggest that there exist a positive relationship between debt and economic growth. Research limitations/implications – The findings from the paper suggest that future research should be conscious of the effect model specification can have on the results on their studies. Indeed, when external debt, the fiscal balance, debt relief where included in the econometric specification the relationship between debt and growth was weakened. Practical implications – Economic growth should be stimulated, if the proceeds from debt issues are utilized to finance investment in productive areas of economic activity. Originality/value – While the relationship between debt and growth has stimulated a number of research papers, seminars and conferences, to date, however, no clear answer to the question is available. Through the use of meta-analysis, this paper allows the reader to glean the main findings from this body of research.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Emerald Group Publishing in its journal International Journal of Development Issues.
Volume (Year): 9 (2010)
Issue (Month): 3 (July)
Contact details of provider:
Web page: http://www.emeraldinsight.com
Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
Other versions of this item:
- Moore, Winston & Thomas, Chrystol, 2008. "A Meta-Analysis of the Relationship between Debt and Growth," MPRA Paper 21474, University Library of Munich, Germany.
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
- H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
- C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Oks, Daniel & van Wijnbergen, Sweder, 1995.
"Mexico after the debt crisis: is growth sustainable?,"
Journal of Development Economics,
Elsevier, vol. 47(1), pages 155-178, June.
- Oks, Daniel & van Wijnbergen, Sweder, 1994. "Mexico after the debt crisis : is growth sustainable?," Policy Research Working Paper Series 1378, The World Bank.
- Krugman, Paul, 1988.
"Financing vs. forgiving a debt overhang,"
Journal of Development Economics,
Elsevier, vol. 29(3), pages 253-268, November.
- HÃ©lÃ¨ne Poirson & Luca Antonio Ricci & Catherine A. Pattillo, 2004. "What Are the Channels Through Which External Debt Affects Growth?," IMF Working Papers 04/15, International Monetary Fund.
- Presbitero Andrea F., 2006.
"The Debt-Growth Nexus: a Dynamic Panel Data Estimation,"
Rivista italiana degli economisti,
Società editrice il Mulino, issue 3, pages 417-462.
- Andrea PRESBITERO, 2005. "The Debt-Growth Nexus: a Dynamic Panel Data Estimation," Working Papers 243, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
- Ralf Hepp, 2008.
"Can Debt Relief Buy Growth?,"
Fordham Economics Discussion Paper Series
dp2008-22, Fordham University, Department of Economics.
- Card, David & Krueger, Alan B, 1995. "Time-Series Minimum-Wage Studies: A Meta-analysis," American Economic Review, American Economic Association, vol. 85(2), pages 238-43, May.
- S. M. Ali Abbas & Jakob Christensen, 2007. "The Role of Domestic Debt Markets in Economic Growth," IMF Working Papers 07/127, International Monetary Fund.
- John Weeks, 2000. "Latin America and the 'high performing Asian economies': growth and debt," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(5), pages 625-654.
- Manishi Prasad & Peter Wahlqvist & Rich Shikiar & Ya-Chen Tina Shih, 2004. "A," PharmacoEconomics, Springer Healthcare | Adis, vol. 22(4), pages 225-244.
- Bjerg, Christina & Bjørnskov, Christian & Holm, Anne, 2011.
"Growth, debt burdens and alleviating effects of foreign aid in least developed countries,"
European Journal of Political Economy,
Elsevier, vol. 27(1), pages 143-153, March.
- Bjerg, Christina & Bjørnskov, Christian & Holm, Anne, 2007. "Growth, Debt Burdens and Alleviating Effects of Foreign Aid in Least Developed Countries," Working Papers 07-1, University of Aarhus, Aarhus School of Business, Department of Economics.
- Tito Cordella & Luca Antonio Ricci & Marta Ruiz-Arranz, 2005. "Debt Overhang or Debt Irrelevance? Revisiting the Debt Growth Link," IMF Working Papers 05/223, International Monetary Fund.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Virginia Chapman).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.