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 This approach allows researchers to combine the results from both published and unpublished research to gain insights regarding the directional and statistical significance of the relationship between the two variables.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.
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Bibliographic InfoArticle provided by Emerald Group Publishing in its journal International Journal of Development Issues.
Volume (Year): 9 (2010)
Issue (Month): 3 (July)
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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.:
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- 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.
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