External debt and growth: role of stable macroeconomic policies
Purpose – This study aims to examine the impact of external debt on economic growth in Bangladesh within a broader macroeconomic scenario. Design/methodology/approach – In the process of doing so, it assesses the empirical cointegration, long-run and short-run dynamics of the concerned variables for...
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| Format: | Article |
| Language: | English |
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Emerald Publishing
2020-07-01
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| Series: | Journal of Economics Finance and Administrative Science |
| Subjects: | |
| Online Access: | https://www.emerald.com/insight/content/doi/10.1108/JEFAS-05-2019-0069/full/pdf?title=external-debt-and-growth-role-of-stable-macroeconomic-policies |
| _version_ | 1811265768002682880 |
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| author | Sima Rani Dey Mohammad Tareque |
| author_facet | Sima Rani Dey Mohammad Tareque |
| author_sort | Sima Rani Dey |
| collection | DOAJ |
| description | Purpose – This study aims to examine the impact of external debt on economic growth in Bangladesh within a broader macroeconomic scenario. Design/methodology/approach – In the process of doing so, it assesses the empirical cointegration, long-run and short-run dynamics of the concerned variables for the period of 1980–2017 applying the autoregressive distributed lag (ARDL) bounds testing approach to cointegration. First, debt-gross domestic product linkage explores the impact of external debt impact on economic growth using a set of macro and country risk variables, and then this linkage is also analyzed along with a newly formed macroeconomic policy (MEP) variable using principal component analysis. Findings – The study results reveal the negative impact of external debt on GDP growth, but the larger positive impact of MEP index indicates that this adverse effect of debt can be mitigated or even nullified by sound MEP and appropriate human resource policy. Originality/value – The dynamic effects of different shocks (external debt and macro policy variable) on economic growth by vector autoregression impulse response function also confirm our ARDL findings. |
| first_indexed | 2024-04-12T20:29:51Z |
| format | Article |
| id | doaj.art-e93c82ff974f45dfbb8dbeca6699eec7 |
| institution | Directory Open Access Journal |
| issn | 2077-1886 2218-0648 |
| language | English |
| last_indexed | 2024-04-12T20:29:51Z |
| publishDate | 2020-07-01 |
| publisher | Emerald Publishing |
| record_format | Article |
| series | Journal of Economics Finance and Administrative Science |
| spelling | doaj.art-e93c82ff974f45dfbb8dbeca6699eec72022-12-22T03:17:46ZengEmerald PublishingJournal of Economics Finance and Administrative Science2077-18862218-06482020-07-01255018520410.1108/JEFAS-05-2019-0069649345External debt and growth: role of stable macroeconomic policiesSima Rani Dey0Mohammad Tareque1Bangladesh Institute of Governance and Management, Dhaka, BangladeshBangladesh Institute of Governance and Management, Dhaka, BangladeshPurpose – This study aims to examine the impact of external debt on economic growth in Bangladesh within a broader macroeconomic scenario. Design/methodology/approach – In the process of doing so, it assesses the empirical cointegration, long-run and short-run dynamics of the concerned variables for the period of 1980–2017 applying the autoregressive distributed lag (ARDL) bounds testing approach to cointegration. First, debt-gross domestic product linkage explores the impact of external debt impact on economic growth using a set of macro and country risk variables, and then this linkage is also analyzed along with a newly formed macroeconomic policy (MEP) variable using principal component analysis. Findings – The study results reveal the negative impact of external debt on GDP growth, but the larger positive impact of MEP index indicates that this adverse effect of debt can be mitigated or even nullified by sound MEP and appropriate human resource policy. Originality/value – The dynamic effects of different shocks (external debt and macro policy variable) on economic growth by vector autoregression impulse response function also confirm our ARDL findings.https://www.emerald.com/insight/content/doi/10.1108/JEFAS-05-2019-0069/full/pdf?title=external-debt-and-growth-role-of-stable-macroeconomic-policiesexternal debteconomic growthmacroeconomic policyardlc32h63e23e60 |
| spellingShingle | Sima Rani Dey Mohammad Tareque External debt and growth: role of stable macroeconomic policies Journal of Economics Finance and Administrative Science external debt economic growth macroeconomic policy ardl c32 h63 e23 e60 |
| title | External debt and growth: role of stable macroeconomic policies |
| title_full | External debt and growth: role of stable macroeconomic policies |
| title_fullStr | External debt and growth: role of stable macroeconomic policies |
| title_full_unstemmed | External debt and growth: role of stable macroeconomic policies |
| title_short | External debt and growth: role of stable macroeconomic policies |
| title_sort | external debt and growth role of stable macroeconomic policies |
| topic | external debt economic growth macroeconomic policy ardl c32 h63 e23 e60 |
| url | https://www.emerald.com/insight/content/doi/10.1108/JEFAS-05-2019-0069/full/pdf?title=external-debt-and-growth-role-of-stable-macroeconomic-policies |
| work_keys_str_mv | AT simaranidey externaldebtandgrowthroleofstablemacroeconomicpolicies AT mohammadtareque externaldebtandgrowthroleofstablemacroeconomicpolicies |