Gul, Adnan (2008): Is external debt an effective way of bringing economic reforms?
Download (238kB) | Preview
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.
|Item Type:||MPRA Paper|
|Original Title:||Is external debt an effective way of bringing economic reforms?|
|Keywords:||External Debt; Growth; Pakistan Economy; Debt overhang; Crowding out|
|Subjects:||F - International Economics > F3 - International Finance > F34 - International Lending and Debt Problems
C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C12 - Hypothesis Testing: General
|Depositing User:||adnan gull|
|Date Deposited:||09. Oct 2008 09:20|
|Last Modified:||18. Feb 2013 07:42|
Agénor, Pierre, 2002, Macroeconomic Adjustment and the Poor: Analytical Issues and Cross-Country Evidence. Washington DC: The World Bank.
Agenor, Pierre, 2005, The Economics of Adjustment and Growth, Harvard University Press, Cambridge, Mass.
Aggarwal, Vinod K, 1996, Debt Games. Strategic interaction in international debt rescheduling, Cambridge University Press.
Ajayi, S. Ibi, 1996, An analysis of external debt and Capital Flight in the Heavily Indebted Poor Countries of Sub-Saharan Africa, in: Iqbal, Zubair/ Kanbur, Ravi (ed.), External finance for low income countries. Washington DC: International Monetary Fund.
Anderson, T. W., and C. Hsiao, 1981, Estimation of dynamic models with error components, Journal of American Statistical Association, Vol. 76, No. 375, pp. 598¬606.
Arellano, Manuel, and Stephen R. Bond, 1991, Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations, Review of Economic Studies, Vol. 58, pp. 277-297.
Asiedu, Elizabeth, 2003, Debt relief and institutional reform: a focus on Heavily Indebted Poor Countries, The Quarterly Review of Economics and Finance Vo. 43, pp. 614¬626.
Baldacci, Emanuelle, de Mello, Luiz, Inchauste, Gabriele, 2002, Financial Crisis, Poverty, and Income Distribution, Working Paper 04/2002. Washington DC: International Monetary Fund.
Barro, R.J, 1990, Government Spending in a simple Model of Endogenous Growth, Journal of political economy, 98 (2): 103-25.
Basu, Kanshik, 1997, Analytical development economics. The less developed economy revisited, MIT Press.
Birdsall, Nancy, and Brian Deese, 2002, Beyond HIPC: Secure Sustainable Debt Relief for Poor Countries, Center for Global Development Working Paper, No. 44.
Blundell, Richard, and Stephen Bond, 1997, Initial conditions and moment restrictions in dynamic panel data models, Journal of Econometrics, Vol. 87, pp. 115-143.
Blundell, Richard, Stephen Bond, and Frank Windmeijer, 2000, Estimation in Dynamic Panel Data Models: Improving on the Performance of the Standard GMM Estimators, The Institute of Fiscal Studies Working Paper, No. 00/12.
Bond, Stephen, Anke Hoeffler, and Jonathan Temple, 2001, GMM Estimation of Empirical Growth Models, mimeo, September 2001.
Bond, Stephen, Asli Leblebicioglu, and Fabio Schiantarelli, 2004, Capital Accumulation and Growth: A New Look at the Empirical Evidence, Boston College Working Paper in Economics, No. 591.
Breen, Richard, Garcia-Peñalosa, Cecilia, 1999, Income inequality and macroeconomic volatility: an empirical investigation. European University Institute, Oxford.
Bruno, Giovanni S.F., 2004, Approximating the Bias of the LSDV Estimator for Dynamic Unbalanced Panel Data Models, Bocconi University Working Paper EEA 2004-1
Burnside, Craig and David Dollar, 2000, Aid, Policies and Growth, American Economic Review, Vol. 90, No. 4, pp. 847-68, September 2000.
Chowdhury, Abdur R., 2004, External Debt, Growth and the HIPC Initiative: Is the Country Choice Too Narrow?, chapter 8 in Debt Relief for Poor Countries, ed. by Addison, Hansen and Tarp.
Claessens, Stjin, Detragiache, Enrica, Kanbur, Ravi, Wickham, Peter, 1996, Analytical aspects of debt problems, in: Iqbal, Zubair, Kanbur, Ravi (ed.), External finance for low-income countries. Washington DC: International Monetary Fund.
Claessens, Stijn, Diwan, Ishac, 1989, Liquidity, Debt Relief, and Conditionality, in: Husain, Ishrat, Diwan, Ishac (ed.), Dealing with the Debt Crisis: 213 – 225.
Clements, Benedict, Rina Bhattacharya, and Toan Q. Nguyen, 2004, External Debt, Public Investment, and Growth in Low-Income Countries, IMF Working Paper No. 03/249.
Cline, William, 1995, International Debt Reexamined, (Washington D.C: Institute for International Economics).
Cohen, Daniel, 1993, Low Investment and Large LCD Debt in the 1980‘s, The American Economic Review, Vol. 83, No. 3.
Cohen, Daniel, 1997, Growth and External Debt: A New Perspective on the African and Latin American Tragedies, Centre of Economic Policy Discussion Paper, No. 1753.
Cordella, Tito, Luca A. Ricci, and Marta Ruiz-Arranz, 2005, Deconstructing HIPCs‘ Debt Overhang, mimeo, International Monetary Fund, April 2005.
Davidson, Russel, and James G. MacKinnon, 2004, Econometric Theory and Methods, Oxford University Press, Oxford.
Davoodi, Hamid R., Tiongson, Erwin R., Asawanuchit, Sawitree S, 2003, How useful are benefit incidence analyses of public education and health spending? Working Paper 03/227. Washington DC: International Monetary Fund.
Dornbusch, 1989, Reducing Transfers from Debtor Countries, in Dornbusch, Aternative Solutions to developing-country debt problems.
Eastwood, Robert, Lipton, Michael, 2001, Pro-poor growth and pro-growth Poverty: Meaning, Evidence, and Policy Implications, in: Asian Development Review 19(1).
Elbadawi, Ibrahim A., Benno J. Ndulu, and Njuguna Ndung‘u, 1999, Debt Overhang and Economic Growth in Sub-Saharan Africa, chapter 5 in External Finance for Low-Income Countries, ed. by Iqbal, Zubair, and Ravi Kanbur (Washington D.C: IMF Institute).
Erixon, Fredrik, 2005, Aid and Development: Will it Work This Time?, International Policy Network, June 2005.
Gallup, John Luke, Radelet, Steven, Warner, Andrew, 1999, Economic Growth and the Income of the Poor, CAER II Discussion Paper 36, Harvard Institute for International Development.
Ghei, Nita, Hinkle, Lawrence E, 1999, A note on nominal devaluation, inflation, and the real exchange ratte. In: Hinkle, Lawrence E., Montiel, Peter J., Exchange rate misalignment.
Geiger, L.T, 1990, Debt and economic development in Latin America, The Journal of Developing Areas, 24, pp.181-194.
Geske Dijkstra and Niels Hermes, 2001, The uncertainty of debt service payments and economic growth of highly indebted poor countries: Is there a case for debt relief? Faculty of Public Policy, Erasmus University Rotterdam.
Grün, Carola, Klasen, Stephan, 2001, Growth, income distribution and well-being in transition countries. Economics of Transition 9/2: 359 – 394.
Gugerty, Mary Kay, Timmer, Peter C, 1999, Growth, Inequality, and Poverty Alleviation: Implications for Development Assistance, CAER II Discussion Paper 50 December 1999, Harvard Institute for International Development, Cambridge, Mass.
Gupta, Sanjeev, Benedict Clements, Emanuele Baldacci, and Carlos Mulas-Granados, 2005, Fiscal policy, expenditure composition, and growth in low-income countries, Journal of International Money and Finance, Vol. 24, pp. 441-463.
Gunning, Jan W., and Richard Mash, 1998, Fiscal Implications of Debt and Debt Relief: Issues Paper. Mimeo.
Hansen, Henrik, 2004, The Impact of External Aid and External Debt on Growth and Investment. chapter 7 in Debt Relief for Poor Countries, ed. by Addison, Hansen and Tarp.
Hoeffler, Anke E., 2002, The augmented Solow model and the African growth debate, Oxford Bulletin of Economics and Statistics, Vol. 64, No. 2, pp. 135-158.
Imbs, Jean, and Romain Ranciere, 2005, The Overhang Hangover, World Bank Policy Research Working Paper, No. 3673, August 2005.
Judson, Ruth A., and Ann L. Owen, 1999, Estimating dynamic panel data models: a guide for macroeconomists, Economic Letters, No. 65, pp. 9-15.
Kakwani, Nanak, Pernia, Ernesto M, 2000, What is Pro-poor growth?, in: Asian Development Review 18(1): 1 – 16.
Kakwani, Nanak, Son, Hyun H., Khandker, Shahidur, 2003, Poverty equivalent growth rate: with applications to Korea and Thailand.
Kiviet, Jan F., 1995, On bias, inconsistency, and efficiency of various estimators in dynamic panel data models, Journal of Econometrics, Vol. 68, pp. 53-78.
Kneller, R., Bleaney, M.F. and Gemmell, 1999, Fiscal Policy and Growth: Evidence from OECD countries, Journal of Public Economics, 74: 171-190.
Kraay, Aart, and Vikram Nehru, 2004, When Is External Debt Sustainable? World Bank Policy Research Working Paper, No. 3200.
Krugman, Paul, 1988, Financing vs. Forgiving a Debt Overhang, Journal of Development Economics, No. 29, pp. 253-268.
Maureen Were, 2001, The Impact of External Debt on Economic Growth and Private Investments in Kenya: An Empirical Assessment, A paper to be presented at the Wider Development Conference 17-18 August 2001, Helsinki.
Morisset, Jacques, 1990, Can Debt-Reduction Restore Economic Growth in Highly Indebted Countries?, in: Revue d’économie politique, 101(4): 639 – 666.
Nikbakht, Ehsan, 1984, Foreing loans and economic performance. The experience of the less developed countries, New York.
Moss, Todd J., and Hanley S. Chiang, 2003, The Other Costs of High Debt in Poor Countries: Growth, Policy Dynamics, and Institutions, Issue Paper on Debt Sustainability, Center for Global Development, Washington DC, August 2003.
Nkurunziza, Janvier D., and Robert H. Bates, 2003, Political Institutions and Economic Growth in Africa, CSAE Working Paper, No. 2003-03.
Pattillo, Catherine, Helene Poirson, and Luca Ricci, 2002, External Debt and Growth, IMF Working Paper, No. 02/69.
Rajan, Raghuram G., and Arvind Subramanian, 2005, What Undermines Aid’s Impact on Growth? IMF Working Paper WP/05/126, International Monetary Fund, Washington, DC.
Roodman, David, 2003, XTABOND2: Stata module to extend xtabond dynamic panel data estimator, Statistical Software Components S435901, Boston College Department of Economics, revised 22 Apr 2005.
Sachs, Jeffrey D., 1989, The Debt Overhang of Developing Countries. In Debt, Stabilization and Development, by Calvo, Guillermo A., Ronald Findlay, Pentti Kouri, and Jorge Braga de Macedo, (Oxford: Basil Blackwell).
Savvides, A, 1992, Investment slowdown in developing countries during the 1980s: debt overhang or foreign capital inflows, Kyklos, 45 (3), pp. 363-378.
Serieux, John E, 2001, Debt of the poorest countries: Anatomy of a crisis kept on hold, in: Canadian Journal of Development Studies 22(2): 289 – 295.
Serven, Luis, 1996, Irreversibility, Uncertainty and Private Investment: Analytical Issues and Some Lessons for Africa, The World Bank, Mimeo, December 1996.
Temple, J. R. W, 1999, The New Growth Evidence, in: Journal of Economic Literature 37: 112 – 156.