External Debt and Growth in Emerging Economies

The paper studies the relationship between external debt and economic growth in a panel of emerging countries. A number of economists have proposed different methods of analysing the nexus between economic growth and public debt. The paper investigates the debt-growth nexus using a linear and non-linear specification, employing a panel ARDL model on 13 emerging countries during the period 1990–2016. The results show that there is no robust effect of debt on economic growth in the long run; however in the short run, external debt is negatively and significantly correlated to economic growth.