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The Effect of External Public Debt in Developing Countries on Economic Growth - an Empirical Study on Argentina

In: Social Issues

Submitted By eddiemhlau
Words 3688
Pages 15
Abstract This paper would discuss the effect of external debt on economic growth with four areas, the effect on private local investment, foreign direct investment, government expenditure and export growth. Three theoretical models are adopted, namely Debt Overhang Theory, Liquidity Constraint Hypothesis and Crowding-out Effect respectively. Two policy implications on debt relief and debt restructuring are analyzed. And finally, the paper will include the discussion on the necessary tradeoff with inflation and contractionary fiscal budgeting after debt servicing.

KEY Words: Heavily In-debt Poor Countries (HIPC), External Debt/Foreign Debt) Sustainability, Debt-GNI Ratio, Debt-Export Ratio, Debt Service Ratio

Word count (excluding table of content, tables and reference): 2974

Topic: The Effect of External Public Debt in Developing Countries on Economic Growth - An Empirical Study on Argentina

Abstract P.1
1. Introduction P.3 1.1 Literature Review P.4 1.2 Structure and Magnitude of External Debt of Argentina P.4 1.3 Theoretical Relationship between External Debt and Economic Growth P.6 1.4 Research Question(s) and Framework P.7
2. Data Collection and Empirical Analysis P.7 2.1 The effect of external public debt on: P.7 2.1.1 Private Domestic Investment P.7 2.1.2 Foreign Direct Investment P.9 2.2 The effect of external public debt on government expenditure P.10 2.3 The effect of external public debt on export growth P.12
3. Research findings and Policy Implications on…...

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