The Causal Relationship Between Foreign Debt and Economic Growth: Evidence from Commonwealth Independent States

2021 ◽  
pp. 001573252110183
Author(s):  
Nermin Yasar
Keyword(s):  
Economic Growth ◽  
Causal Relationship ◽  
Economic Transition ◽  
Foreign Debt ◽  
External Debt ◽  
Value Added ◽  
Transition Process ◽  
Jel Classification ◽  
Independent States

This study investigates the relationship between external borrowing and economic growth in the Commonwealth Independent States during the period 1995–2018. Autoregressive distributed lag (ARDL) model is employed to determine the co-integration relationship among the series and then vector error correction model (VECM) is used to analyse the causality between external debt and income. The obtained results suggest that there is a negative long-term unidirectional causal relationship running from external debt to GDP presenting a strong evidence of existence of debt overhang hypothesis. The possible reasons for this unidirectional causal relationship can be explained by poor management of provided financial resources and incomplete governance in economic transition process along with structural rigidities and immature institutions in these countries which, in the long term, resulted in insufficient capital charged to service external debt. The policymakers in these post-Soviet countries should not use foreign loans to capitalise the deficits in the economies; instead, they should be more determined in employing these funds in the areas that will create national value-added production and, thus, future income. JEL Classification: C10, F34, H63

Reshaping the Economic Structure in Argentina: The Role of External Debt during the Macri Administration (2015–2019)

2021 ◽  
pp. 048661342097642
Author(s):  
Juan E. Santarcángelo ◽  
Juan Manuel Padín
Keyword(s):  
External Debt ◽  
Economic Structure ◽  
The United States ◽  
Jel Classification ◽  
Financial Capital ◽  
Economic Policies ◽  
Right Wing ◽  
Long Term Effects

Argentina’s right-wing shift in the 2015 presidential election concluded twelve years of center-left rule. The elected president, Mauricio Macri, claimed that the economy would experience normalization of existing imbalances and recover its strength in a “new political era.” However, the new administration quickly restored the dominance of neoliberal economic policies through a comprehensive set of initiatives, which centrally included the return to international financial debt and equity markets and submission to the International Monetary Fund’s (IMF) rules. This article analyzes Argentina’s external-debt-growth process and discusses its objectives and long-term effects. This paper posits that the indebtedness process carried out by the Macri administration—and its modality—not only increased the relevance of financial capital in the Argentine economy but also structurally conditioned any future nonorthodox alternative path of development. This outcome cannot be understood without taking into account the deliberate role of the United States, the IMF, and the top companies that operate in Argentina, as well as the complicity of many political sectors. JEL Classification: H63, F34, F63

C. PENGARUH UTANG LUAR NEGERI DAN EKSPOR TERHADAP PERTUMBUHAN EKONOMI (Studi pada Produk Domestik Bruto Indonesia Periode 2015-2019)

2021 ◽  
Vol 4 (1) ◽  
pp. 22
Author(s):  
Farah Syahri Maulidiyah
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Regression Analysis ◽  
Linear Regression Analysis ◽  
Foreign Debt ◽  
External Debt ◽  
Multiple Linear Regression Analysis ◽  
Analysis Method ◽  
Indonesian Government ◽  
Independent Variable

ABSTRACT The purpose of this research is to analyze the influence of exports and foreign debt which can affect Indonesia's GDP (Gross Domesty Product). The variables of this research are the foreign debt value of the Indonesian government and the value of Indonesian exports as the independent variable, and the value of Indonesia's GDP as the dependent variable. The data used are supporting data for the 2015-2019 period from the time series (time series) of Bank Indonesia and BPS. The data analysis method used multiple linear regression analysis. The results of this study are the value of the Indonesian government's foreign debt and the value of Indonesia's exports have a significant effect. Meanwhile, the results of the partial test (t-test) show that the value of foreign debt and exports of the Indonesian government greatly affects the value of Indonesia's GDP. Keywords : External Debt, Export, Economic Growth (Menggunakan template jurnal sinta 2 JESP (Jurnal Ekonomi dan Studi Pembangunan) eISSSN : 2502-7115 l pISSN : 2502-7115 Universitas Negeri Malang).

scholarly journals Schumpeterian aspects of growth and its correlative classical and neoclassical approaches

2021 ◽  
pp. 85-117
Author(s):  
Sergio A. Berumen
Keyword(s):  
Economic Growth ◽  
Important Determinant ◽  
Jel Classification ◽  
Central Concept ◽  
Goods And Services ◽  
Palabras Clave ◽  
Standards Of Living ◽  
Capital Humano ◽  
Sustainable Economic Growth

Economic Growth is a central concept in Economic Theory. Most of the modern societies regard growth as an important determinant for rising standards of living. Their effects can be observed not only in more goods and services but also in brand new processes. Investment in human capital is re-garded as the very source of long-term, sustainable Economic Growth. The purpose of this paper is to provide a brief description of Economic Growth, how to approach its measurement, and to provide a brief review of the Schum-peterian thought and the main schools that have undertaken from the Classical and Neoclassical Approaches. Key Words: Economic Growth; Schumpeterian Thought; Classical and Neo-classical Approaches. JEL Classification: B12, B13, B52, O43, O49. Resumen: El crecimiento económico es un concepto fundamental de la teoría económica. La mayoría de las sociedades modernas consideran el crecimiento como una determinante importante para el incremento de los niveles de vida. Sus efectos se pueden observar en el aumento de bienes y servicios, pero también en la disponibilidad de nuevos procesos. En este escenario, la inver-sión en capital humano es, de hecho, la fuente original del crecimiento económico a largo plazo y de manera sostenible. El objetivo del presente trabajo consiste en explorar los principales rudimentos del crecimiento económico, de su preceptiva medición y de mostrar las aportaciones originales alcanzadas desde el Pensamiento Schumpeteriano, así como de su contrastación con las perspectivas Clásicas y Neoclásicas. Palabras clave: Crecimiento económico; Pensamiento Schumpeteriano; aproxi-maciones Clásica y Neoclásica.

scholarly journals Analisis Kausalitas Pertumbuhan Ekonomi, Indeks Pembangunan Manusia Dan Belanja Modal Di Provinsi.Jambi

2021 ◽  
Vol 5 (2) ◽  
pp. 565
Author(s):  
Yolanda Sari ◽  
Etik Winarni ◽  
Muhammad Amali
Keyword(s):  
Economic Growth ◽  
Human Development ◽  
Causal Relationship ◽  
Capital Expenditure ◽  
Secondary Data ◽  
Unit Roots ◽  
Causality Analysis ◽  
Economic Activities ◽  
Constant Prices

This research aims toaanalyze the causal relationshipbbetween several variables including economiccgrowth using the value of PDRB at constant prices, the variable humanndevelopment index (HDI) and capitaleexpenditures in Jambi Province during 2010-2020 period. The data used in this research is secondary data with a database obtained from BPS Jambi Province and Regional Financial Statistics Jambi Province. The method used in this research is the Granger causality analysis method, which was previously tested using unit roots and cointegration methods to see the long-termrrelationship betweenrresearch variables. The results showed that there was a long-term relationship between the research variables. Economic growth has a one-way causal relationship with HDI. Economic growth increases the supply of resources needed for human development which in turn will encourage better human development. The capital expenditure variable has a one-way causal relationship with the economic growth variables. The allocation of capital for the implementation of various community economic activities and become an economic stimulus in Jambi Province.

scholarly journals Strengthening Indonesia's Economic Growth with Islamic and non-Islamic Macroeconomic Variable

2020 ◽  
Vol 11 (1) ◽  
pp. 107-128
Author(s):  
Eba Ismi Alifah ◽  
Anton Bawono
Keyword(s):  
Economic Growth ◽  
Error Correction ◽  
Foreign Debt ◽  
Error Correction Model ◽  
Correction Model ◽  
Islamic Bank ◽  
Short And Long Term ◽  
The Government ◽  
Autoregressive Conditional Heteroscedasticity

Abstract: This research was conducted to determine the effect of taxes, Sukuk, grants, inflation, foreign debt, total financing, and the network of Islamic bank offices on Indonesia's economic growth. Research data for each variable is monthly from 2009-2018. Data analysis variables use Error Correction Model (ECM) Test and Autoregressive Conditional Heteroscedasticity (ARCH) Test with Eviews ver.10. The results showed that in the short and long term, variables taxes, Sukuk, inflation, foreign debt, total financing, and office networks of Islamic banks) affected the Indonesian economic growth. At the same time, grants have no significant effect on economic growth. For variable predictions in the next year (2019), only economic growth, grants, inflation, foreign debt, and network of Islamic bank offices can be predicted. Meanwhile, taxes, Sukuk, and total financing cannot be identified in 2019 because the variables are not significant in the ARCH analysis, so it cannot be diagnosed about future values. This result implies that the government and the community must continue to work together to manage state revenues used to fund productive projects to stimulate economic growth.Abstrak: Penelitian ini dilakukan untuk mengetahui pengaruh pajak, sukuk negara, hibah, inflasi, utang luar negeri, jumlah pembiayaan dan jaringan kantor bank syariah terhadap pertumbuhan ekonomi Indonesia. Data penelitian setiap variabel berupa bulanan dari tahun 2009-2018. Uji variabel penelitian menggunakan Uji Error Correction Model (ECM) dan Uji ARCH menggunakan Eviews ver.10. Hasil penelitian menunjukkan bahwa dalam jangka pendek maupun jangka panjang, variabel pajak, sukuk negara, inflasi, utang luar negeri, jumlah pembiayaan dan jaringan kantor bank syariah berpengaruh signifikan terhadap pertumbuhan ekonomi Indonesia. Sedangkan variabel hibah tidak berpengaruh secara signifikan terhadap pertumbuhan ekonomi. Untuk prediksi variabel di tahun berikutnya (tahun 2019), hanya variabel pertumbuhan ekonomi, hibah, inflasi, utang luar negeri dan jumlah jaringan kantor bank syariah yang dapat diprediksi, sedangkan pajak, sukuk negara, dan jumlah pembiayaan tidak dapat diketahui nilai perkembangannya di tahun 2019 karena variabel tersebut tidak signifikan pada analisis ARCH. Sehingga tidak dapat di diagnosa dalam bentuk ARCH untuk dilakukan forecast data agar diketahui tentang nilai di masa yang akan datang. Implikasi dari temuan ini adalah diperlukan upaya yang berkesinambungan dari pemerintah dan masyarakat dalam mengelola penerimaan negara yang dimanfaatkan untuk mendanai proyek yang produktif sehingga dapat mempercepat pertumbuhan ekonomi. 

scholarly journals Potential Tax Reforms and Kuwait Economic Growth

2019 ◽  
pp. 42-48
Author(s):  
K. Lawler ◽  
F. Ali Al-Sayegh
Keyword(s):  
Economic Growth ◽  
Time Series Data ◽  
Value Added ◽  
Least Square ◽  
Series Data ◽  
Tax Reforms ◽  
Tax Revenues ◽  
Oil Revenue ◽  
The Impact

The objective of this study is to identify whether tax reforms are viable in Kuwait in order to create more government income from sources other than oil. The study examines the relationship between the changes in tax revenues, changes in oil revenue and changes in GDP in Kuwait using time series data from 1998 to 2015. The Augmented Dickey-Fuller (ADF) is used to check for the existence of a unit root. The cointegration test is applied to test for long term relationships between variables using the General Least Square (GLS) method of estimation. The results of the tests find that the impact of changes in tax revenues on changes in the GDP of Kuwait is insignificant. Therefore, Kuwait’s government could rationally implement tax reforms to have incremental sources of income other than oil revenue. Moreover, it is argued that the government might consider implementing broad based consumption taxes and value added taxes into the tax structure Kuwait, and to invest the revenues from those taxes in productive policies, to induce long term economic growth.

scholarly journals AN ANALYSIS OF ECONOMIC GROWTH IN INDONESIA A NEW PARADIGM

2013 ◽  
Vol 12 (1) ◽  
pp. 70
Author(s):  
Carolyn Currie
Keyword(s):  
Economic Growth ◽  
Rational Expectations ◽  
Early Stage ◽  
Foreign Debt ◽  
Poverty Line ◽  
Jel Classification ◽  
Budget Deficits ◽  
New Paradigm ◽  
Debt Burden ◽  
Present Generation

<p>Analyses of the nature of debt relying on the theory of rational expectations conclude that the burden of public debt need not fall on future generations if the present generation anticipates the higher taxes needed in the future for debt servicing. However, there have been many instances where increases in budget deficits have been followed by a decrease in the savings propensity of the private sector. Foreign exchange earnings also have to be set aside. It appears that the main problem for countries in an early stage of economic development, is that often the borrowings have not been productively employed so that a national debt crises results. Foreign lenders become increasingly reluctant to lend further amounts to a country, which has been a net capital importer. This paper puts forward a methodology of testing a new theory of economic growth using Indonesia as a case study, as it represents a case of faltering economic growth and financial instability resulting in a huge increase in foreign debt, a depreciating currency and a dramatic increase in the percentage of population below the poverty line. The theory emphasises key factors determining the success or failure of policies that change underlying economic structures, and hence would lead to an intrinsic monitoring of “overborrowing”.</p><p>JEL classification: L33; O11; O38; O47; P11; P52</p><p>Key Words: Economic Growth. Debt Burden, Regulation, Ownership Structures</p>

scholarly journals The Effect Of Corruption, Democracy And Foreign Debt On Economic Growth In Asian Pacific Countries

2021 ◽  
Vol 3 (2) ◽  
Author(s):  
Rommy Fernando Putra ◽  
Dewi Zaini Putri
Keyword(s):  
Economic Growth ◽  
Panel Data ◽  
Regression Coefficient ◽  
Foreign Debt ◽  
External Debt ◽  
Asia Pacific ◽  
Pacific Region ◽  
Asia Pacific Region ◽  
Political Condition ◽  
Data Documentation

Economic growth can be defined as a process of changing the economic conditions of a country on an ongoing basis towards a better condition during a certain period. This study aims to examine the effect of corruption, democracy and external debt on economic growth in 7 countries Asia Pasific. This is because of The Asia Pacific became known around the 1980s when financial market, international trade and political condition have increased. The data used is panel data during the period 2014-2018, and collected by data documentation and library obtained from World Bank, International Transparency and Freedom In The World. Using the panel data regression, the estimation results are (1) Corruption has a positive and significant effect on economic growth in 7 Asia Pacific countries, with a regression coefficient value of -0.2753, (2) Democracy has a positive and significant effect on economic growth in 7 Asia Pacific countries with a regression coefficient value of 0.0586, (3) External debt has a significant positive effect on economic growth in 7 countries Asia Pacific region with a regression coefficient of 0.7604 (4) Corruption, Democracy and External Debt have a significant effect on economic growth in 7 countries in the Asia Pacific region, with a probability value (F-statistic) of 0.0008

THE CAUSAL RELATIONSHIP BETWEEN INSURANCE AND ECONOMIC GROWTH IN NIGERIA (1986-2010)

2012 ◽  
Vol 02 (12) ◽  
pp. 49-57
Author(s):  
TAIWO AKINLO
Keyword(s):  
Economic Growth ◽  
Interest Rate ◽  
Causal Relationship ◽  
Causality Test ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error ◽  
Long Run ◽  
Short Run

This study examined the causal relationship between insurance and economic growth in Nigeria over the period 1986-2010. The Vector Error Correction model (VECM) was adopted. The cointegration test shows that GDP, premium, inflation and interest rate are cointegrated when GDP is the edogeneous variable. The granger causality test reveals that there is no causality between economic growth and premium in short run while premum, inflation and interest rate Granger cause GDP in the long run which means there is unidirectional causality running from premium, inflation and interest rate to GDP. This means insurance contributes to economic growth in Nigeria as they provide the necessary long-term fund for investment and absolving risks.

Risky Business in Conflict Zones: Opportunities and Threats in Post Conflict Economies

2012 ◽  
Vol 1 (2) ◽  
pp. 76 ◽  
Author(s):  
Umit Hacioglu ◽  
Ismail Erkan Celik ◽  
Hasan Dincer
Keyword(s):  
Economic Growth ◽  
Corporate Culture ◽  
Low Cost ◽  
Transition Process ◽  
Recovery Process ◽  
Conflict Zones ◽  
International Firms ◽  
Post Conflict ◽  
Conflict Risk

Attracting international businesses and enterprises to transfer both resources and capabilities into post conflict economies is a must for sustaining long term stability, economic growth and success of recovery process. Recently, international business organizations operating in post-conflict countries became more integrated with recovery and transition process of post conflict economies. In this study, the opportunities and threats for international firms operating in post conflicted economies have been evaluated based on literature review. This study also demonstrates that (1) investment opportunities in transition economies are attractive for short and mid-term, (2) capturing undervalued firms, accessing unique marketplace, benefiting incentives, accessing IMF’s and the World Bank’s low cost credit resources and having a good reputation via contributing into stability and peace are just some of the major advantage (3) the loss of control and capital attached to the risk of unstable political conditions, the possibility of high ethnic tensions and violent riots, the lack effective corporate culture and high burden of inside conflicts, the lack of sustainable economic growth and the risk of new tax packages have negative impacts on long term success for the firms (4) the conflict risk itself is major problem dissolving investment conditions.

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