External Debts and Economic Growth

812 WordsJan 27, 20183 Pages
External debts and economic growth Literature Review A study was conducted on foreign aid, domestic savings and economic growth by (khan & Rahim, 1993).the result indicates a positive but insignificant result statistically of economic growth with its varies form of contemporaneous values of economic assistance. Foreign aid shows statistically a significant positive correlation with economic growth. From the regression analysis the result shows negative correlation between foreign aid and domestic effort. In a whole the result shows a positive relationship among financial aid, economic growth and savings. Similarly a study was conducted on the effect of IMF programs on economic growth by (Przeworski & Vreeland, 2000). The study indicates that the government goes due to pressure under these programs of IMF due to the foreign reserve crises and also to secure from the governmental cost of adjustment policies. Due to this programme, the growth rate will slow until the programme exists in a country. When they leave this programme the growth rate becomes high and increases but not that much because they have participated from IMF. Likely another study was conducted on the impact of foreign capital inflow on savings and investment: a case of Pakistan by (Aslam, 1987). The study shows that the net foreign capital inflow has a negative effect on domestic saving and is significant at conventional level. A study was conducted similarly on Economic Growth, Export, and
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