Growth and External Debt: A New Perspective on the African and Latin American Tragedies
AbstractThis paper addresses two puzzles of the growth literature: the failure of standard growth equations to account for slow growth in Latin America and Africa; and the surprising failure of trade to explain growth when trade liberalization appears to play a significant role. The paper shows that: i) African growth is readily explained by macroeconomic mismanagement and low investment; ii) trade liberalization should be taken as a proxy for good ‘macroeconomic’ management rather than a genuine measure of the effect of trade upon growth; and iii) poor growth in Latin America (which does not seem to be explained by the preceding feature) is explained well by a variable (constructed in the text) representing the likelihood of debt crisis.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1753.
Date of creation: Dec 1997
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Other versions of this item:
- Cohen, Daniel, 1997. "Growth and external debt: a new perspective on the african and latin american tragedies," CEPREMAP Working Papers (Couverture Orange) 9715, CEPREMAP.
- F34 - International Economics - - International Finance - - - International Lending and Debt Problems
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- Rolf Maier, 2005. "External Debt and Pro-Poor Growth," Macroeconomics 0504031, EconWPA.
- M. Wasiqur Rahman Khan & Haydory Akbar Ahmed, 2012. "Dynamics of foreign earnings, assistance and debt servicing in Bangladesh," International Journal of Development Issues, Emerald Group Publishing, vol. 11(1), pages 74-84, April.
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- Petia Topalova & Dan Nyberg, 2010. "What Level of Public Debt Could India Target?," IMF Working Papers 10/7, International Monetary Fund.
- Jeromin Zettelmeyer, 2006. "Growth and Reforms in Latin America," IMF Working Papers 06/210, International Monetary Fund.
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