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Is external debt an effective way of bringing economic reforms?

Listed author(s):
  • Gul, Adnan
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    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.

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    File URL: https://mpra.ub.uni-muenchen.de/10979/1/MPRA_paper_10979.pdf
    File Function: original version
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    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 10979.

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    Date of creation: 10 Sep 2008
    Handle: RePEc:pra:mprapa:10979
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    1. Bond, Steve & Asli, Leblebicioglu & Schiantarelli, Fabio, 2004. "Capital Accumulation and Growth: A New Look at the Empirical Evidence," IZA Discussion Papers 1174, Institute for the Study of Labor (IZA).
    2. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 103-126, October.
    3. 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.
    4. Raghuram G. Rajan & Arvind Subramanian, 2014. "What Undermines Aid’s Impact on Growth?," Working Papers id:6191, eSocialSciences.
    5. Stephen Bond & Anke Hoeffler & Jonathan Temple, 2001. "GMM Estimation of Empirical Growth Models," Economics Papers 2001-W21, Economics Group, Nuffield College, University of Oxford.
    6. 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.
    7. Blundell, R. & Bond, S., 1995. "Initial Conditions and Moment Restrictions in Dynamic Panel Data Models," Economics Papers 104, Economics Group, Nuffield College, University of Oxford.
    8. Claessens, Stijn & Detragiache, Enrica & Kanbur, Ravi & Wickham, Peter, 1996. "Analytical aspects of the debt problems of heavily indebted poor countries," Policy Research Working Paper Series 1618, The World Bank.
    9. Imbs, Jean & Ranciere, Romain, 2005. "The overhang hangover," Policy Research Working Paper Series 3673, The World Bank.
    10. Breen, R. & Garcia-Penalosa, C., 1999. "Income Inequality and Macroeconomic Volatility: an Empirical Investigation," G.R.E.Q.A.M. 99b11, Universite Aix-Marseille III.
    11. Asiedu, Elizabeth, 2003. "Debt relief and institutional reform: a focus on Heavily Indebted Poor Countries," The Quarterly Review of Economics and Finance, Elsevier, vol. 43(4), pages 614-626.
    12. Judson, Ruth A. & Owen, Ann L., 1999. "Estimating dynamic panel data models: a guide for macroeconomists," Economics Letters, Elsevier, vol. 65(1), pages 9-15, October.
    13. Kneller, Richard & Bleaney, Michael F. & Gemmell, Norman, 1999. "Fiscal policy and growth: evidence from OECD countries," Journal of Public Economics, Elsevier, vol. 74(2), pages 171-190, November.
    14. Catherine Pattillo & Hélène Poirson & Luca Antonio Ricci, 2011. "External Debt and Growth," Review of Economics and Institutions, Università di Perugia, vol. 2(3).
    15. Serven, Luis, 1997. "Irreversibility, Uncertainty and Private Investment: Analytical Issues and Some Lessons for Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 6(3), pages 229-268, Supplemen.
    16. William R. Cline, 1995. "International Debt Reexamined," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 46, 03.
    17. Erwin H Tiongson & Hamid R Davoodi & Sawitree S. Asawanuchit, 2003. "How Useful Are Benefit Incidence Analyses of Public Education and Health Spending," IMF Working Papers 03/227, .
    18. repec:oxf:wpaper:2001-w21 is not listed on IDEAS
    19. International Monetary Fund, 2002. "Financial Crises, Poverty, and Income Distribution," IMF Working Papers 02/4, .
    20. repec:oxf:wpaper:wps/2003-03 is not listed on IDEAS
    21. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
    22. Kraay, Aart & Nehru, Vikram, 2004. "When is external debt sustainable?," Policy Research Working Paper Series 3200, The World Bank.
    23. Janvier Nkurunziza & Robert Bates, 2004. "Political Institutions And Economic Growth In Africa," Development and Comp Systems 0409028, EconWPA.
    24. Paul R. Krugman, 1988. "Financing vs. Forgiving a Debt Overhang," NBER Working Papers 2486, National Bureau of Economic Research, Inc.
    25. Raghuram G. Rajan & Arvind Subramanian, 2005. "What Undermines Aid's Impact on Growth?," NBER Working Papers 11657, National Bureau of Economic Research, Inc.
    26. Anke E. Hoeffler, 2000. "The Augmented Solow Model and the African Growth Debate," CID Working Papers 36, Center for International Development at Harvard University.
    27. Jonathan Temple, 1999. "The New Growth Evidence," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 112-156, March.
    28. Gupta, Sanjeev & Clements, Benedict & Baldacci, Emanuele & Mulas-Granados, Carlos, 2005. "Fiscal policy, expenditure composition, and growth in low-income countries," Journal of International Money and Finance, Elsevier, vol. 24(3), pages 441-463, April.
    29. repec:oxf:wpaper:1999-w20 is not listed on IDEAS
    30. Richard Blundell & Steve 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.
    31. repec:oxf:wpaper:2004-w08 is not listed on IDEAS
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