June 14, 2021 (Monday) 12:15-12:50
WIAPS Full-time Faculty/Research Associates, WIAPS Exchange Researchers/Visiting Scholars/Visiting Researchers, GSAPS MA/PhD Students
KIKUCHI, Tomoo （Associate Professor, GSAPS）
Does Foreign Debt Contribute to Economic Growth?
We study the relationship between foreign debt and economic growth using a panel data set of 114 countries from 1980 to 2015. We find that economic growth correlates positively with foreign debt and that the relationship is causal in nature by using sovereign credit rating as an instrumental variable. Furthermore, we find that foreign debt increases economic growth through private investment and capital accumulation, and that the mechanism is supported by “uphill” capital flows from non-OECD to OECD countries.