External Debt, Public Investment, and Growth in Low-Income Countries
Electronic Access:
Free Download. Use the free Adobe Acrobat Reader to view this PDF file
Summary:
This paper examines the channels through which external debt affects growth in low-income countries. Our results suggest that the substantial reduction in the stock of external debt projected for highly indebted poor countries (HIPCs) would directly increase per capita income growth by about 1 percentage point per annum. Reductions in external debt service could also provide an indirect boost to growth through their effects on public investment. If half of all debt-service relief were channeled for such purposes without increasing the budget deficit, then growth could accelerate in some HIPCs by an additional 0.5 percentage point per annum.
Series:
Working Paper No. 2003/249
Subject:
Debt burden Debt service External debt Public debt Public investment spending
English
Publication Date:
December 1, 2003
ISBN/ISSN:
9781451875904/1018-5941
Stock No:
WPIEA2492003
Pages:
25
Please address any questions about this title to publications@imf.org