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Is external debt an effective way of bringing economic reforms?

Author

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  • Gul, Adnan

Abstract

This paper investigates the adverse effects of external debt on economic performance. In order to cater the issue of errors in mathematical model developed to analyze the correlation, this paper deals by performing a hypothetical analysis on economic growth within a country at different levels of external debt. The analysis is done on all sectors at the same time to ensure maximum accuracy. The paper concludes that debt itself is not an effective way of helping underdeveloped countries. This study adds in finding effective means which will allow underdeveloped countries to get a foothold on the development ladder of economy.

Suggested Citation

  • Gul, Adnan, 2008. "Is external debt an effective way of bringing economic reforms?," MPRA Paper 10979, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:10979
    as

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    File URL: https://mpra.ub.uni-muenchen.de/10979/1/MPRA_paper_10979.pdf
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    References listed on IDEAS

    as
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    4. Aart Kraay & Vikram Nehru, 2006. "When Is External Debt Sustainable?," World Bank Economic Review, World Bank Group, vol. 20(3), pages 341-365.
    5. Jean Imbs & Romain Rancière, 2005. "The Overhang Hangover," Swiss Finance Institute Research Paper Series 06-03, Swiss Finance Institute.
    6. Richard Blundell & Stephen Bond & Frank Windmeijer, 2000. "Estimation in dynamic panel data models: improving on the performance of the standard GMM estimator," IFS Working Papers W00/12, Institute for Fiscal Studies.
    7. Carola Grün & Stephan Klasen, 2001. "Growth, income distribution and well-being in transition countries," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 9(2), pages 359-394, July.
    8. Cohen, Daniel, 1997. "Growth and External Debt: A New Perspective on the African and Latin American Tragedies," CEPR Discussion Papers 1753, C.E.P.R. Discussion Papers.
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    18. Catherine Pattillo & Hélène Poirson & Luca Antonio Ricci, 2011. "External Debt and Growth," Review of Economics and Institutions, Università di Perugia, vol. 2(3).
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    More about this item

    Keywords

    External Debt; Growth; Pakistan Economy; Debt overhang; Crowding out;

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General

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