| ID | 161486 |
| Title Proper | Exploring the channels and impact of debt on economic growth |
| Other Title Information | evidence from South Asia |
| Language | ENG |
| Author | Munir, Kashif |
| Summary / Abstract (Note) | The objective of this study is to analyse the effect of debt on economic growth as well as the channels, that is, investment, total factor productivity (TFP), interest rate and saving channel through which debt affects economic growth in South Asian countries. The study uses growth model based on conditional convergence and augments to include debt. Panel data of four South Asian countries from 1990 to 2013 at annual frequency are utilized and fixed effect model is used for estimation. The results of the study showed that inverted U-shaped relationship exists between debt and economic growth in South Asian countries. However, the most important and significant channel through which debt affects economic growth is private and public investment as well as TFP. Reducing debt accumulation alone will not rectify the problem unless the supplementary macroeconomic policies are made sound; therefore, there is a dire need to improve macroeconomic policies, good governance and elimination of structural distortions. |
| `In' analytical Note | South Asia Economic Journal Vol. 19, No.2; Sep 2018: p.171-191 |
| Journal Source | South Asia Economic Journal 2018-12 19, 2 |
| Key Words | Investment ; South Asia ; Economic Growth ; Saving ; Debt ; Total Factor Productivity |