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Effect of External Debts on Economic Growth

In: Business and Management

Submitted By simai
Words 12805
Pages 52
Södertörns högskola | Department of economics Magisteruppsats 30 hp | Vårterminen 2013

The Effect of External Debt On Economic growth

– A panel data analysis on the relationship between external debt and economic growth.

Av: Dereje Abera Ejigayehu Handledare: Joakim persson
Handledare: [Handledarens namn (teckenstorlek: 12p)]

Abstract The impact of external debt on economic growth is a debatable issue between scholars since the onset of the debt crisis in 1980’s. This thesis examines whether external debt affects the economic growth of selected heavily indebted poor African countries through the debt overhang and debt crowding out effect. This is carried out by using data for eight heavily indebted poor African countries between 1991 to 2010.The result from estimation shows that external debt affects economic growth by the debt crowding out effect rather than debt overhang. Moreover, in an attempt to mark out debt servicing history, the thesis found the selected countries are not paying (servicing) more than 95% of their accumulated debt. Key Words: External Debt, Debt overhang, Debt crowding out, debt servicing and

Table of Contents
CHAPTER ONE .....................................................................................................................................1 INTRODUCTION ..................................................................................................................................1 1.1 Background of the study............................................................................................................1 1.2 statement of the problem .........................................................................................................3 1.3 Objective of the study ...............................................................................................................3 1.4 Hypotheses of the...

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