External Debt and Growth
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The authors assesses the non linear impact of external debt on growth using panel data for 93 developing countries and finds that the average impact of debt becomes negative at about 160-170 percent of exports or 35-40 percent of GDP and the marginal impact of the debt at about half of these values.Abstract:
This paper assesses the non linear impact of external debt on growth using panel data for 93 developing countries. The estimates support a non-linear, hump- shaped relationship between debt and growth, especially when the debt burden is measured relative to GDP. For a country with average indebtedness, doubling the debt ratio reduces growth by a third to a half percentage point after controlling for endogeneity. Our findings also suggest that the average impact of debt becomes negative at about 160-170 percent of exports or 35-40 percent of GDP and the marginal impact of debt at about half of these values.read more
Citations
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Public Debt Overhangs: Advanced- Economy Episodes Since 1800
TL;DR: In this article, the authors identify 26 episodes of public debt overhang, 20 of which lasted more than a decade, and the long duration of these episodes implies that the cumulative shortfall in output from such overhang is potentially massive, and these growth-reducing effects of high public debt are apparently not transmitted exclusively through high real interest.
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Public debt and economic growth: Is there a causal effect?
TL;DR: This article used an instrumental variable approach to study whether public debt has a causal effect on economic growth in a sample of OECD countries and found that there is no evidence that public debt is associated with economic growth.
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The impact of high and growing government debt on economic growth: an empirical investigation for the euro area
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The Initial Impact of the Crisis on Emerging Market Countries
TL;DR: In this article, the authors explore the role of two shocks (the collapse in trade and the sharp decline in financial flows) in the transmission of the crisis from the advanced economies to emerging market countries.
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What Are the Channels Through Which External Debt Affects Growth
TL;DR: In this article, the authors investigate the channels through which debt affects growth, specifically whether debt affects either physical capital accumulation or total factor productivity growth, and test for the presence of nonlinearities in the effects of debt on the different sources of growth.
References
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Initial conditions and moment restrictions in dynamic panel data models
Richard Blundell,Stephen Bond +1 more
TL;DR: In this paper, two alternative linear estimators that are designed to improve the properties of the standard first-differenced GMM estimator are presented. But both estimators require restrictions on the initial conditions process.
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Growth Empirics: A Panel Data Approach
TL;DR: In this article, a panel data approach is advocated and implemented for studying growth convergence, and the familiar equation for testing convergence is reformulated as a dynamic panel data model, and different panel data estimators are used to estimate it.
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Where Has All the Education Gone
Lant Pritchett,Lant Pritchett +1 more
TL;DR: Pritchett et al. as discussed by the authors found that education did not lead to faster economic growth and pointed out that increasing educational capital resulting from improvements in the educational attainment of the labor force has no positive impact on the growth rate of output per worker.
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It's Not Factor Accumulation : Stylized Facts and Growth Models
William Easterly,Ross Levine +1 more
TL;DR: The authors argue that these facts do not support models with diminishing returns, constant returns to scale, some fixed factor of production, and that highlight the role of factor accumulation in economic growth.