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| Title: | | The debt-growth nexus in poor countries: a reassessment  |
| Authors: | | Presbitero, Andrea F. |
| Issue Date: | | 2007 |
| Series/Report no.: | | Economics Discussion Papers / Institut für Weltwirtschaft 2007-17 |
| Abstract: | | This paper investigates the relationship between external indebtedness and economic growth, with a particular attention to LICs, for which the theoretical arguments of debt overhang and liquidity constraint have to be reconsidered. The estimation of a growth model, with a panel of 121 developing countries, supports a negative and linear relationship between past values of the NPV of external public debt and current economic growth. This could be due to the ?extended debt overhang?, according to which a large indebtedness leads to misallocation of capital and discourage long-term investment and structural reforms. |
| Subjects: | | External Debt HIPC Debt Relief Economic Growth |
| JEL: | | O11 F34 C33 H63 |
| Creative Commons License: | |  |
| Document Type: | | Working Paper |
| Appears in Collections: | | Economics: The Open-Access, Open-Assessment E-Journal - Discussion Papers
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