Impact of Trade Openness and External Debt on Economic Growth PDF Download
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Author: Mahwish Zafar
Publisher: LAP Lambert Academic Publishing
ISBN: 9783659785870
Category :
Languages : en
Pages : 88
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Book Description
Do lesser obstacles to international trade and more external debt encourage an optimistic result on economic growth? This has been a burning topic within the ground of economics for more than a century. The most important purpose of this research is to investigate the impact of trade openness and external debt on wide-reaching economic growth. Panel regression has been used for the analysis purpose.Conclusion of the research indicates a positive relationship between trade openness and economic growth but negative association between foreign debt and economic growth of regions. On the basis of the empirical results acquired, it is strongly recommended to policy makers and economists to provide new horizons for lesser trade barriers. However, we conclude that macroeconomic instabilities, economic factors like inflation, unemployment and government expenditures are the main source of explaining economic growth in the long run.Furthermore external debt is an essential factor for economic growth in the developing countries. Even then it is considered as burden for the economic health of that state.
Author: Mahwish Zafar
Publisher: LAP Lambert Academic Publishing
ISBN: 9783659785870
Category :
Languages : en
Pages : 88
Get Book Here
Book Description
Do lesser obstacles to international trade and more external debt encourage an optimistic result on economic growth? This has been a burning topic within the ground of economics for more than a century. The most important purpose of this research is to investigate the impact of trade openness and external debt on wide-reaching economic growth. Panel regression has been used for the analysis purpose.Conclusion of the research indicates a positive relationship between trade openness and economic growth but negative association between foreign debt and economic growth of regions. On the basis of the empirical results acquired, it is strongly recommended to policy makers and economists to provide new horizons for lesser trade barriers. However, we conclude that macroeconomic instabilities, economic factors like inflation, unemployment and government expenditures are the main source of explaining economic growth in the long run.Furthermore external debt is an essential factor for economic growth in the developing countries. Even then it is considered as burden for the economic health of that state.
Author: Jaejoon Woo
Publisher: International Monetary Fund
ISBN: 145520157X
Category : Business & Economics
Languages : en
Pages : 49
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Book Description
This paper explores the impact of high public debt on long-run economic growth. The analysis, based on a panel of advanced and emerging economies over almost four decades, takes into account a broad range of determinants of growth as well as various estimation issues including reverse causality and endogeneity. In addition, threshold effects, nonlinearities, and differences between advanced and emerging market economies are examined. The empirical results suggest an inverse relationship between initial debt and subsequent growth, controlling for other determinants of growth: on average, a 10 percentage point increase in the initial debt-to-GDP ratio is associated with a slowdown in annual real per capita GDP growth of around 0.2 percentage points per year, with the impact being somewhat smaller in advanced economies. There is some evidence of nonlinearity with higher levels of initial debt having a proportionately larger negative effect on subsequent growth. Analysis of the components of growth suggests that the adverse effect largely reflects a slowdown in labor productivity growth mainly due to reduced investment and slower growth of capital stock.
Author: Adam Yagoob
Publisher:
ISBN:
Category :
Languages : en
Pages : 9
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Book Description
This paper is an attempt to develop Cointegration and Error Correction Model (ECM) that evaluates the effect of external debt sustainability on economic growth of Sudan; then, compares the long run relationship between external debt and economic growth. The compatibility of the two methods together will be assessed in comparing the results. The data retrieved from World Development Indicators (WDI) of The World Bank for the period 1978-2011. The empirical results showed that trade openness, inflation, capital formation and measures of external debt sustainability have a significant impact on the economic growth of Sudan. Furthermore, this result is confirmed by the estimates of both Johansen Cointegration and Engle Granger error correction method. However, the later showed that initially, effect of the changes in the explanatory variables on economic growth is above the equilibrium. The equilibrium level is achieved extremely slowly as the speed of adjustment in economic growth is found to be a fraction of zero.
Author: Kevin Greenidge
Publisher: International Monetary Fund
ISBN: 1475514298
Category : Business & Economics
Languages : en
Pages : 23
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Book Description
This paper addresses the issue of threshold effects between public debt and economic growth in the Caribbean. The main finding is that there exists a threshold debt to gross domestic product (GDP) ratio of 55–56 percent. Moreover, the debt dynamics begin changing well before this threshold is reached. Specifically, at debt levels lower than 30 percent of GDP, increases in the debt-to-GDP ratio are associated with faster economic growth. However, as debt rises beyond 30 percent, the effects on economic growth diminishes rapidly and at debt levels reaching 55-56 percent of GDP, the growth impacts switch from positive to negative. Thus, beyond this threshold, debt becomes a drag on growth.
Author: Bada Han
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 43
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Book Description
We explore the role of sectoral debt dynamics in shaping business cycles in a sample of 52 Emerging Market Economies (EMEs) and Frontier Market Economies (FMEs) from 2005 to 2021. Higher household debt levels and growth are associated with significantly slower GDP growth in more developed EMEs but not in less developed EMEs and FMEs. We also examine the relationship between US dollar cycles, sectoral debt levels and growth, and economic activity. Among developed EMEs, higher expected household debt growth magnifies the impact of US dollar fluctuations on economic activity, with significant but less persistent effects on consumption and more persistent effects on investment. Our empirical findings highlight the important role of household debt dynamics in relatively developed EMEs.
Author: Romain Wacziarg
Publisher: Edward Elgar Publishing
ISBN: 9781788111492
Category : Free trade
Languages : en
Pages : 0
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Book Description
This compelling two-volume collection presents the major literary contributions to the economic analysis of the consequences of trade liberalization on growth, productivity, labor market outcomes and economic inequality. Examining the classical theories that stress gains from trade stemming from comparative advantage, the selection also comprises more recent theories of imperfect competition, where any potential gains from trade can stem from competitive effects or the international transmission of knowledge. Empirical contributions provide evidence regarding the explanatory power of these various theories, including work on the effects of trade openness on economic growth, wages, and income inequality, as well as evidence on the effects of trade on firm productivity, entry and exit. Prefaced by an original introduction from the editor, the collection will to be an invaluable research resource for academics, practitioners and those drawn to this fascinating topic.
Author: M. Ayhan Kose
Publisher: World Bank Publications
ISBN: 1464815453
Category : Business & Economics
Languages : en
Pages : 403
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Book Description
The global economy has experienced four waves of rapid debt accumulation over the past 50 years. The first three debt waves ended with financial crises in many emerging market and developing economies. During the current wave, which started in 2010, the increase in debt in these economies has already been larger, faster, and broader-based than in the previous three waves. Current low interest rates mitigate some of the risks associated with high debt. However, emerging market and developing economies are also confronted by weak growth prospects, mounting vulnerabilities, and elevated global risks. A menu of policy options is available to reduce the likelihood that the current debt wave will end in crisis and, if crises do take place, will alleviate their impact.
Author: Mr.Hamid Faruqee
Publisher: International Monetary Fund
ISBN: 1451966709
Category : Business & Economics
Languages : en
Pages : 42
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Book Description
This paper uses cross-section and panel data to examine the determinants of the current account. The empirics find a significant impact of the stage of development and demographic factors in the cross section. Estimating partial-adjustment and error-correction models using panel data, the paper finds a short- and long-run impact of fiscal policy on the current account in the time series. The real exchange rate, the business cycle and the terms of trade are also shown to have short-run effects on the current account, while the stage of development and demographics have longer-run effects.
Author: Gus Garita
Publisher: Rozenberg Publishers
ISBN: 9051708785
Category :
Languages : en
Pages : 228
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Book Description
Author: Alfred Greiner
Publisher: Springer Science & Business Media
ISBN: 3642017452
Category : Business & Economics
Languages : en
Pages : 148
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Book Description
Starting point of this book is the observation that an increase in public debt must be accompanied by a rise in the primary surplus of the government to guarantee sustainability of public debt. The book first elaborates on that principle from a theoretical point of view and then tests whether empirical evidence for that rule can be found. Additional tests are implemented to gain further evidence on sustainability of public debt. In order to allow for time varying coefficients penalized spline estimations are performed. The theoretical chapters present endogenous growth models and assume that the primary surplus rises as public debt increases so that sustainability of public debt is given. Implications of public deficits and debt are studied assuming full employment and for unemployment. The conclusion summarizes the findings and compares the results of the different models. Finally, policy implications are given showing how governments should deal with high public debt to GDP ratios.
