Advanced Search
MyIDEAS: Login to save this article or follow this journal

The Role of Domestic Debt Markets in Economic Growth: An Empirical Investigation for Low-Income Countries and Emerging Markets

Contents:

Author Info

  • S M Ali Abbas
  • Jakob E Christensen

Abstract

This paper develops a new public domestic debt database covering 93 low-income countries and emerging markets over 1975–2004 to estimate the growth impact of domestic debt. Moderate levels of noninflationary domestic debt, as a share of GDP and bank deposits, are found to exert a positive overall impact on economic growth. Granger-causality regressions suggest support for a variety of channels: improved monetary policy; broader financial market development; strengthened domestic institutions/accountability; and enhanced private savings and financial intermediation. There is some evidence that, above a ratio of 35 percent of bank deposits, domestic debt begins to undermine growth, lending credence to traditional crowding out and bank efficiency concerns. Importantly, the growth contribution of domestic debt is higher if it is marketable, bears positive real interest rates, and is held outside the banking system.

Download Info

If 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.
File URL: http://www.palgrave-journals.com/imfsp/journal/v57/n1/pdf/imfsp200924a.pdf
File Function: Link to full text PDF
Download Restriction: Access to full text is restricted to subscribers.

File URL: http://www.palgrave-journals.com/imfsp/journal/v57/n1/full/imfsp200924a.html
File Function: Link to full text HTML
Download Restriction: Access to full text is restricted to subscribers.

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 Info

Article provided by Palgrave Macmillan in its journal IMF Staff Papers.

Volume (Year): 57 (2010)
Issue (Month): 1 (April)
Pages: 209-255

as in new window
Handle: RePEc:pal:imfstp:v:57:y:2010:i:1:p:209-255

Contact details of provider:
Web page: http://www.palgrave-journals.com/

Order Information:
Postal: Palgrave Macmillan Journals, Subscription Department, Houndmills, Basingstoke, Hampshire RG21 6XS, UK
Email:
Web: http://www.palgrave-journals.com/pal/subscribe/index.html

Related research

Keywords:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Bua, Giovanna & Pradelli, Juan & Presbitero, Andrea F., 2014. "Domestic public debt in low-income countries : trends and structure," Policy Research Working Paper Series, The World Bank 6777, The World Bank.
  2. Aadil Nakhoda, 2013. "Bank Competition and Export Diversification," EERI Research Paper Series EERI RP 2013/12, Economics and Econometrics Research Institute (EERI), Brussels.
  3. Claeys, Peter & Moreno, Rosina & Suriñach, Jordi, 2012. "Debt, interest rates, and integration of financial markets," Economic Modelling, Elsevier, Elsevier, vol. 29(1), pages 48-59.
  4. Essers, Dennis & Cassimon, Danny, 2012. "Washing away original sin: vulnerability to crisis and the role of local currency bonds in Sub-Saharan Africa," IOB Working Papers, Universiteit Antwerpen, Institute of Development Policy and Management (IOB) 2012.12, Universiteit Antwerpen, Institute of Development Policy and Management (IOB).
  5. Yibin Mu & Peter Phelps & Janet Gale Stotsky, 2013. "Bond Markets in Africa," IMF Working Papers, International Monetary Fund 13/12, International Monetary Fund.
  6. Andrea Filippo Presbitero, 2010. "Total public debt and growth in developing countries," Mo.Fi.R. Working Papers, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences 44, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
  7. Andrea F. Presbitero, 2012. "Domestic debt in Low-Income Countries," Economics Bulletin, AccessEcon, vol. 32(2), pages 1099-1112.
  8. Islam, Iyanatul & Ahmed, Ishraq & Roy, Rathin & Ramos, Raquel, 2012. "Macroeconomic policy advice and the Article IV consultations a development perspective," ILO Working Papers, International Labour Organization 478371, International Labour Organization.
  9. Avellaneda-Kantt, Maria Belen, 2012. "Perspectiva Macroeconomica y Tendencias en el Mercado de Deuda Latinoamericano: ¿El viraje hacia instrumentos de Fondeo Domesticos?
    [Macroeconomic Outlook and Trends in Latin American Debt Capital
    ," MPRA Paper 44271, University Library of Munich, Germany, revised 16 Jan 2013.
  10. Mayowa Gabriel AJAO & Aigbedo Omorose OGIEMUDIA, 2013. "Foreign Debt Management and the Development of Nigeria Economy," Review of Economics & Finance, Better Advances Press, Canada, vol. 3, pages 99-109, February.
  11. International Monetary Fund, 2010. "A Historical Public Debt Database," IMF Working Papers, International Monetary Fund 10/245, International Monetary Fund.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:pal:imfstp:v:57:y:2010:i:1:p:209-255. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Elizabeth Gale).

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.