The Role of External Debt on Economic Growth: Evidence from Pakistan Economy

Journal of Economics and Sustainable Development, Vol. 5, No. 24, 2014

9 Pages Posted: 1 Dec 2014

See all articles by Rashid Zaman

Rashid Zaman

Lincoln University New Zealand

Muhammad Arslan

Bahria University Alumnus; Lincoln University (NZ)

Date Written: December 1, 2014

Abstract

External debt plays a major role in shaping the economic activity of any country. The purpose of the study is to determine the role of external debt on economic growth in Pakistan economy. The study incorporate Gross domestic product (GDP) as a measure of economic growth and gross domestic saving (GDS), gross capital formation (GCF) and external debt stock (EDS) as measure of economic debt. OLS regression model has been employed along with descriptive statistics over the time series data for 39 years. The statistical findings of the study reveal that gross capital formation (GCF) and external debt stock has significant positive effect on Pakistan GDP while gross domestic saving does not have significant impact on GDP of Pakistan.

Keywords: External Debt, Gross Domestic Product, Economic Growth.

Suggested Citation

Zaman, Rashid and Arslan, Muhammad, The Role of External Debt on Economic Growth: Evidence from Pakistan Economy (December 1, 2014). Journal of Economics and Sustainable Development, Vol. 5, No. 24, 2014. Available at SSRN: https://ssrn.com/abstract=2532275

Rashid Zaman

Lincoln University New Zealand ( email )

Ellesmere Jct Rd, Lincoln 7647
Chrsitchurch, 7647
New Zealand

Muhammad Arslan (Contact Author)

Bahria University Alumnus ( email )

44000 Islamabad
Pakistan
+923317500173 (Phone)

HOME PAGE: http://www.muhammadarslan.info/

Lincoln University (NZ) ( email )

PO Box 85084
Ellesmere Junction Road/Springs Road
Lincoln, 7647
New Zealand

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