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Does external debt- poverty relationship confirm the debtoverhang hypothesis for developing counties?

Listed author(s):
  • Taha Zaghdoudi

    ()

    (Faculty of Law, Economics and Management of Jendouba, Tunisia)

  • Abdelaziz Hakimi

    ()

    (Faculty of Law, Economics and Management of Jendouba, Tunisia)

This paper investigates the impact of external debt on poverty for a panel of 25 developing countries over the period 2000-2015. By performing panel cointegration model, we found strong evidence of a positive and significant long-run relationship between poverty, external debt, GDP per capita, gross domestic and fixed investment. Findings indicate also the existence of negative and significant association between poverty, infrastructure, health condition and openness. The Granger-causality results indicate bidirectional causality between external debt and poverty in both short- and long-run. This paper supports the view that external debt increase poverty in developing countries.

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File URL: http://www.accessecon.com/Pubs/EB/2017/Volume37/EB-17-V37-I2-P60.pdf
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Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 37 (2017)
Issue (Month): 2 ()
Pages: 653-665

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Handle: RePEc:ebl:ecbull:eb-16-00874
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