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What Are the Channels Through Which External Debt Affects Growth? [electronic resource] Poirson, Hélène.

Author/Creator:
Poirson, Hélène.
Publication:
Washington, D.C. : International Monetary Fund, 2004.
Series:
IMF eLibrary
IMF Working Papers; Working Paper No. 04/15.
IMF Working Papers; Working Paper No. 04/15
Format/Description:
Government document
Book
1 online resource (34 p.)
Local subjects:
Debt accumulation.
Debt crises.
Debt crisis.
Debt data.
Debt explosions.
Debt intolerance.
Debt overhang.
Debt problems.
Debt ratio.
Debt ratios.
Debt reduction.
Debt relief.
Debt rescheduling.
Debt service.
Debt service to exports.
Debt servicing.
Debt stock.
Debt stock variables.
Debt stocks.
Debt sustainability.
Debt term.
Debt threshold.
Debt-relief.
Economic growth.
Economic Growth of Open Economies.
External debt.
External debt stock.
External debt sustainability.
External finance.
External indebtedness.
External volatility.
Foreign debt.
Gdp growth.
Gdp per capita.
General.
Gnp.
Growth accounting.
Growth model.
Growth rate.
Growth rates.
Heavily indebted countries.
Highly indebted countries.
Indebted countries.
Indebted country.
International Investment.
International lending.
International Lending and Debt Problems.
Long-Term Capital Movements.
Low debt.
Net present value of debt.
Public debt.
Public debt crises.
Repayment ability.
Repayments.
Total external debt.
Total factor productivity.
Algeria.
Argentina.
Bangladesh.
Bolivia.
Brazil.
Cameroon.
Chile.
Colombia.
Congo, Democratic Republic of the.
Congo, Republic of.
Costa Rica.
Cyprus.
Dominican Republic.
Ecuador.
Egypt.
El Salvador.
Ethiopia.
Ghana.
Guatemala.
Guyana.
Haiti.
Honduras.
India.
Indonesia.
Iran, Islamic Republic of.
Jamaica.
Kenya.
Korea, Republic of.
Madagascar.
Malawi.
Malaysia.
Mali.
Mexico.
Morocco.
Mozambique.
Myanmar.
Nicaragua.
Nigeria.
Pakistan.
Panama.
Paraguay.
Peru.
Philippines.
Rwanda.
Saint Lucia.
Senegal.
Sierra Leone.
South Africa.
Sri Lanka.
Sudan.
Tanzania.
Thailand.
Trinidad and Tobago.
Tunisia.
Turkey.
Uganda.
Uruguay.
Venezuela, República Bolivariana de.
Zambia.
Zimbabwe.
Summary:
This paper investigates the channels through which debt affects growth, specifically whether debt affects growth through factor accumulation or total factor productivity growth. It also tests for the presence of nonlinearities in the effects of debt on the different sources of growth. We use a large panel dataset of 61 developing countries over the period 1969-98. Results indicate that the negative impact of high debt on growth operates both through a strong negative effect on physical capital accumulation and on total factor productivity growth. On average, for high-debt countries, doubling debt will reduce output growth by about 1 percentage point and reduce both per capita physical capital and total factor productivity growth by somewhat less than that. In terms of the contributions to growth, approximately one-third of the effect of debt on growth occurs via physical capital accumulation and two-thirds via total factor productivity growth. The results are generally robust to the use of alternative estimators to control (to different extents) for biases associated with unobserved country-specific effects and the endogeneity of several regressors, particularly the debt variables. In particular, the results are shown to be compatible with a simultaneous significant effect of growth on debt ratios, as suggested by Easterly (2001).
Notes:
Description based on print version record.
Contributor:
Pattillo, Catherine A.
Poirson, Hélène.
Ricci, Luca Antonio.
Other format:
Print Version:
ISBN:
1451843291:
9781451843293
ISSN:
1018-5941
Publisher Number:
10.5089/9781451843293.001
Access Restriction:
Restricted for use by site license.
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