External Debt

The external debt burden of many low-income developing countries has increased significantly since the 1970s. Developments in a sample of ten countries show that the main factors behind the buildup of debt were (1) exogenous (adverse terms of trade shocks or weather), (2) a lack of sustained macroeconomic adjustment and structural reforms, (3) nonconcessional lending and refinancing policies of creditors,

External debt plays a vital role in the overall growth and development of a nation. It gives a shape to the economic activities of a country. External debt is more crucial for any developing country like India, where there is always a saving-investment gap. To finance viable or profitable investment opportunities in such a country, the only source is external debt either through ECBs, trade credits, loans from the government of another country, or other financial institutions. In the present paper, we have tried to develop the various factors or macroeconomic variables affecting external debt. The period of data covered is seven years from 2013-14 to 2019-20. The source of Data is the official website of RBI. To determine the factors affecting India's external debt, we have applied a multiple regression model, with the help of which we concluded that different macroeconomic variables like trade balance, exchange rate, foreign exchange reserve, etc., affect external debt. Besides all these variables, time is also one of the essential factors affecting external debt. From analysis, we concluded that various macroeconomic variables affect the level of external debt. Therefore, given the other independent variables like forex reserve, exchange rate, trade balance, and period, we can predict the value of external debt to GDP ratio. The paper also deals with testing the efficacy of the multiple regression model, and we found that the model is highly reliable and efficient.

This study was conducted to evaluate the trend in external debts, and events influencing the increase or decrease
in external debts of Pakistan. Obviously external debt is risky for economic development in both developed and
developing countries but the developing countries are more prone to suffer as compared with developed countries.
Developing countries are facing the problems of capital scarcity, low saving, traditional technology, poor
education and lack of resources for economic development. The problem of public debt in Pakistan is very grave
and is almost of similar nature. Although Pakistan’s external debt has increased because of misuse of loans, and
many developmental projects remained uncompleted due to political instability and frequent changes in
governments policies because each new government plan their new projects and new policies further over burden
the economy. Pakistan’s population increases very rapidly and therefore demand increases. Pakistan is not selfsufficient
in food stuffs and even imports wheat from abroad. Strong defense is imperative for a country but
spending of huge amount on defense increases external debt further. The economic status of Pakistan is very unsafe
with unsustainable external debt. Pakistan has been unsuccessful in controlling a balance between expenditure and
revenue. High and rising external debt burden constitutes a serious constraint for development; a major barrier to
macroeconomic stability and hence, to growth and poverty reduction; a discouragement to foreign investment
because it creates a high risk environment and exchange rate depreciation; and a discouragement for government
to carry out structural reforms in the various sectors of the economy.

Brazil has been a central participant in the developing country debt experience. In quantitative terms, Brazil's $1 10 billion debt accounts for some 10 percent of the total debt of developing countries.'In qualitative terms, Brazil's strategic use of debt in the 1970s and ...

The empirical study explores the Impact of external debts, internal debts, foreign direct investments, Crude oil prices and debt servicing on Stock markets of Pakistan by using time series data from 1994 to 2018 on annual basis. Purpose of study is to investigate impact of debts on Pakistan stock market. External debts, internal debts, foreign direct investments, Crude oil and debt servicing are independent variables while Stock market capitalization is dependent variable. In this empirical study regression analysis model is applied. Model summary results shows that there is a significant impact of independent variables on dependent variable which give acceptance to alternative hypothesis. Value of R indicates that there is strong correlation of 97% between independent and dependent variables. Value of R square that shows that independent variable is strongly explaining variance in dependent variable by 95%. In model summery Durban Watson test shows value of 2.10 which indicates no auto correlation between variables. Correlation coefficients results show that there is a short term positive and significant impact of internal debts on stock market. Foreign direct investments also showed positive and significant impact on stock market capitalization while external debts servicing and crude oil have insignificant negative impact on stock market capitalization. This research will play a very beneficial role for developing countries and will attract wide audience including economists, equity analysts, investors and institutional investors to analyze their investment risk. This empirical research shows insignificant impact of external debts on stock market of Pakistan. Which implies that governments of developing countries can obtain internal debts on easier financial terms; which enhance liquidity and spending of developing countries. Consequently, more spending on infrastructure, power projects and availability of seaports and dry ports enhances the performance of business. Therefore, internal debt contributes toward the growth of financial market of Pakistan.

Pegando no comentário de Marx a Shakespeare em The Power of Money (1844), encontramos um quadro teórico do materialismo histórico/económico onde se percebe qual é a materialidade de um objecto, no sentido estrito; porém, não se percebe tão bem qual é a materialidade de uma abstracção transformada em objecto, como é o caso dos conceitos de dinheiro ou de dívida, já que não se sabe ao certo onde encontrar o princípio e o fim de tais abstracções. No presente ensaio, pretendendo ultrapassar este espectro de Marx, e salientar também como alguns modelos de análise económica contemporâneos (David Shelll e Mark Graeber, p.ex)  são mais adequados à interpretação de Shakespeare, sempre com Timão de Atenas como corpo principal da análise textual a que recorro, irei demonstrar que (1) a relação económica é uma relação humana (2) Shakespeare comenta relações humanas e não atribui significativo juízo de valor ao dinheiro e (3) dinheiro é meio, não é fim.

Dutch Disease is a structural phenomenon that provokes de-industrialization. This study employed the VAR econometric technique in analyzing the existence of the Dutch Disease hypothesis in Nigeria with annual time series data for the period 1961 to 2013. The study is based majorly on the non-oil sectors of agriculture, manufacturing and transport and macroeconomic indicators such as external debt, inflation rate, GDP growth rate and GDP per-capita growth rate. The econometric technique of Chow test revealed that there was structural break in the contributions of the sectors resulting from the introduction of the Structural Adjustment Policy of 1986. Taking account of the structural break and employing the Impulse Response Function (IRF) analysis, the study analyzed the existence of DD hypothesis on the pre-SAP and post-SAP agricultural, manufacturing and transport sectors percentage contribution to GDP which supports the existence of the DD hypothesis in the Nigerian economy as the nominal exchange rate appreciates which deteriorates the sectors. The Johansen Co-integration test and the ADF residual unit root test revealed that there exists a long-run relationship amongst the variables of oilrev, agricon, manucon, transcon and nexr. Furthermore, it was ascertained that volatility/shocks to oil revenue results to fluctuations in the growth of the sectors. The test of causality between oil revenue and the macro-economic indicators showed independence amongst the variables. From the Impulse Response Function (IRF) analysis between oil revenue and the macro-economic indicators, the responses of external debt and inflation rate shows that shocks to oil revenue increases the external debt of the economy and results to high rate of inflation with its attendant consequences. On the other hand, shocks to oil revenue results to negative growth rates of both GDP and GDP per-capita in the Nigerian economy. The study ascertains the existence of the Dutch Disease in the Nigerian economy and concludes that reliance and over-reliance on the oil sector adversely affects the non-oil sectors and the economy at large.  Therefore, there must be a striking structural shift in the non-oil sectors of agriculture, manufacturing and transport to adequately curb the menace imposed by the oil resource sector.

Most emerging countries owe substantial external debt and depend on foreign aid to achieve sustainable economic development. However, this paper's key purpose is to examine the determinants of Somalia's external debt. To achieve this, the study used the autoregressive distributed lag (ARDL) model and cointegration test to establish the short-and long-run relationships during the period from 1980 to 2018. The results show that exchange rate and domestic investment have a significant and positive effect on external debt in the long run, while GDP per capita and government expenditure have a significant negative relationship with external debt; the result in the short run is consistent with the long-run result. The study recommends that the government of Somalia should also concentrate on the profitable sectors (e.g., livestock, fisheries and agriculture) with a view to improving the production and revenue base in order to minimize external debt, government expenditure and imports. Similarly, the expansion of a simpler tax base system and the removal of spending dependence on fiscal stability would boost fiscal balance. Many governments have disguised borrowing by those fiscal measures, which have expanded debt stocks. Foreign debt and aid dependence are not the best ways to ensure a healthy economy, so the Somali governments should start rethinking the allocation of foreign debt and policymakers could promote a strategy and policy to reduce high dependence on debt that has worked in the past.

ABSTRACT
This paper seeks to investigate the impact of Fiscal Policy and External Debt in Nigeria spanning into the period 1970 to 2011. Debt has become inevitable phenomenon in Nigeria, despite its oil wealth. The study applied Ordinary Least Square method to establish a simple relationship between the variables under study. The result revealed that domestic debt and government expenditure both has a positive relationship with external debt while money supply, government revenue, credit to private sector and Debts services all has a negative relationship with external debt. Thus, the paper recommends that to achieve a long term solution to the external debt problem there must be vigorous promotion of the nation’s export trade and drastic reduction in her merchandize imports. External finance should be used only for projects of highest priority. Lastly, the federal government should lay down well considered guidelines for external loans. Thus, Debt can be reduced to the barest minimum by increasing output level (GDP).

 

The UK, US, EU response to the catastrophic economic impact of COVID on Africa, Asia & Latin America is A KICK IN THE TEETH—and this is to put it mildly! The poorest countries, who account <3% of private and public debt owed by so-called developing countries, can request postponement (!!!) of interest payments on debt owed to G7 governments until June 2021 - the so-called 'Debt Service Suspension Initiative'. And that’s it!!! Private lenders, i.e. the super-rich loan-sharks, are refusing to participate, demanding every penny be paid on time, whatever the cost to public health.
The biggest scandal of all is that there’s no scandal!

Monitoring a suitable set of early warning indicators is crucial for the optimal timing of macroprudential measures aimed at reducing the risk of financial crises or at least mitigating their impact on the economy. This article sets out to identify the indicators that should be monitored and to show how to overcome some problems in identifying them. As it is

El rescate mexicano de 1982/83 constituyó un primer y azaroso capítulo en la historia de las finanzas globales contemporáneas que ha estado marcada por numerosas crisis financieras sucesivas hasta nuestros días. Después de ofrecer una síntesis muy breve de la evolución de la deuda externa mexicana en la posguerra, en este ensayo exploramos la importancia creciente del gobierno de los Estados Unidos en las negociaciones y resolución de las crisis de deudas soberanas mexicanas de los años 80 y 90, porque su experiencia estableció el modelo que sirvió casi como prototipo para las demás renegociaciones de las deudas externas de las demás naciones latinoamericanas en esos años. Se analiza a la luz del debate sobre el concepto de " prestamista internacional de última instancia " en el caso de las crisis de deudas soberanas. Abstract The Mexican debt rescue of 1982/83 constituted the first chapter of a series of contemporary global financial crises, which have multiplied over the last decades. After offering a brief summary of Mexican debt history in the postwar era down to the 1970s, this essay explores the increasingly important role of the United States government in the negotiations and resolutions of the Mexican sovereign debt crises in the 1980s and 1990s. This experience was also key in the resolution of many of the other Latin American debt crises and renegotia-tions during the period and can be explored in the light of the debate on the concept of " international lender of last resort " for sovereign debtors.

The focus of this research is to analyze the effects of the International Monetary Fund’ (IMF) Structural Adjustment Programs (SAP) on income distribution, poverty and social wellbeing in a number of African states with a special focus on Zimbabwe and Nigeria during the early 1990s. Both countries had debts that surfaced in the late 70s, Nigeria’s debt is an outcome of private and IMF lending as an effect of the much larger African debt crisis (Ikejiaku, 2008), while Zimbabwe’s debt originated from government borrowing from private parties to fund its civil war (Jones, 2011). Zimbabwe’s need to maintain military expenditures and Nigeria’s economic turmoil forced them both to seek IMF loans.
Despite the IMF’s dedication to eradicate poverty, critics claim that SAP participant countries have experienced increases in poverty rates and income inequality (Abugre, 2000; Lundberg and Squire, 2003). Obviously, the studies conducted on this relationship are relatively fresh and essentially hold a theoretical weight, few are the studies with empirical data support. I concern myself with both types of research, with more emphasis on evidence-backed analyses.
Structural Adjustment Programs are licenses for states to acquire loans from the IMF and/or the World Bank. These programs provide neo-liberal economic conditions for states to implement prior to loan granting. The SAPs aim towards free market development on the expense of the public sector, that is by privatizing public sector services and organizations; Social welfare and subsidies would be eliminated under SAPs. These policies are a reflection of the Washington Consensus (Anup Shah, 2013).

I will estimate the direct impacts and effects of SAPs (between 1985 and 1995) on the Nigerian and Zimbabwean economies. I will use variations in GINI ratio and poverty indicators before the implementation of SAPs and after; the GINI coefficient ranges from 0 (perfect income equality) to 1 (perfect income inequality). Referencing the IMF, World Bank and several economists we will match the goals of such adjustment policies and their actual effects on local economies across the globe. While the IMF extols poverty reduction, a great number of economies around the globe reported higher poverty rates and lower standards of living following the granting of IMF loans and implementation of SAPs (Hertz, 2004). Clearly, within the IMF loaning program SAPs are necessary for development under capitalism, yet it is uncertain if they are beneficial in economies that are floating with poverty (Oberdabernig, 2010).
It is important to note that SAPs are offered with uniformity. That is, the same programs are offered regardless of the country’s economic background or infrastructure. In this case, the African debt crisis played a big role in encouraging African states, though sometimes due to lack of options, to seek IMF loans (Biersteker, 1993). Under the IMF’s SAPs, the role of the state is greatly diminished and regulation is left to the open market in one’s economy, while this is ideal for states with proper infrastructure, most African states in question were emerging from a neo-socialist economic model (Quarterly Journal of International Agriculture 50, 2011) at the time of the implementation of SAPs.
The nature of these African economies prior to SAPs participation plays a great role in determining the efficiency of these programs, yet SAPs by themselves are uniform and strict to the extent that they cripple the ability of such economies to pay back the loans; in accordance to the adjustment programs’ neo-liberal essence, should the SAPs be adjustable for African economies to guarantee development and economic growth? Is the uniformity of such programs hurting African economies rather than improving them? Are SAPs a part of a neo-liberal dependency agenda? Or are all SAPs-participant African economies mismanaging their markets?
Keywords: IMF, SAP, Africa, economic dependency, liberalism, poverty, Zimbabwe, Nigeria.

Borxhi eshte thjesht nje simptome. Shkaku i vertete i borxhit jane nevoja apo deshira e qeverive per te shpenzuar me shume se te ardhurat qe " krijojne " – jane shpenzimet qe mund te vleresohen si te mira apo te keqija. Borxhi eshte nje shenje besimi tek e ardhmja. Ai, individi apo qeveria, qe kerkon borxh ka besim tek ideja qe kerkon te financoje; ai qe te jep borxh ka besim tek ideja jote dhe beson se do marre parate mbrapsht me interes. Fillimi i perdorimit te borxhit publik (kredimarrjes) ne shekullin e 15 i dha hov ekonomise boterore dhe zhvillimit te njerezimit. Por, shperdorimi i besimit mund te sjelle shkaterrim. Borxhi i marre disa dekada rresht e falimentoi Greqine ne vitin 2015, me efekte mjaft te renda tek qytetaret e cdo shtrese dhe moshe. Prandaj, jam dakord qe ta perkufizoj borxhin si nje force nukleare. Nese perdoret sic duhet, behet nje burim energjie per ekonomine dhe mireqenien e njerezve. Ne te kunderten, shkreton ekonomine dhe njerezit.

In this study, we try to explore the effects of globalization and international integration on developing countries’ external debt in 1980-2010 time period. As known, the developing world consists of countries which desire to reach to the developed countries in economic sense. These countries head towards external debt, as it is difficult to realize their development with their insufficient internal sources. In recent half century, the oil shocks in 1973 and 1979, and the debt crises resulted, had been a turning point in the operation of decision mechanisms. Even the banking and financial crisis in 1990s and 2000s, developing countries continued to find out extra sources from internal and external markets. Especially in the last ten years, however, as a result of economic integration, internal and external sources are intertwined and substituted for each other. The study concentrates on the demand side of the external debt rather than the supply side; but occasionally, with fiscal and economical policies as well as international policies are mentioned. It is clear that supporting populist approach or policies of developing countries may lead them into new debt spirals which were also experienced historically. After theoretically examining the external debt, its determinants are empirically analyzed by using panel data analysis. By testing the models, results show that GDP growth ratio, fixed capital formation, population rates, terms of trade, capital flight, external debt services, external debt interest payments, urbanization, general government consumption expenditure and financial liberalization are the main determinants of external debt in developing countries. Keywords: External Debt, Developing Countries, Turkish Economy, Economical and Fiscal Structure, Panel Data Analysis Method. 1980-2010 yılları arası dönemde küreselleşme ve uluslararası entegrasyon faaliyetlerinin gelişmekte olan ülkelerde dış borçlanma üzerinde yarattığı etkiler bu çalışmanın araştırma konusunu oluşturmaktadır. Bilindiği üzere, gelişmekte olan ülkeler iktisadi anlamda gelişmiş olan ülkeleri yakalama gayreti içerisinde bulunan ülkelerdir. Bu ülkeler iktisadi sistem içerinde söz konusu kalkınma hamlesini kendi kaynakları ile gerçekleştirmeleri güç olduğu için dış kaynaklara yönelmektedirler. Dış borçlanmanın son yarım asırlık gelişiminde 1973 ve 1979 petrol şoklarının ve neden olduğu borç krizleri 1980’li yıllarda karar mekanizmalarının işleyişi açısından bir dönüm noktası olmuştur. Benzer şekilde, 1990’lı ve 2000’li yıllarda da gelişmekte olan ülkeler bankacılık ve finansal krizlerle sarsılırken iç ve dış piyasalardan borç arayışlarını sürdürmüşlerdir. Ancak özellikle son on yıllık sürece bakıldığında, ekonomik entegrasyon sonucu, iç ve dış kaynaklar birbirleri ile iç içe geçmiş ve birbirlerini ikame eder hale gelmiştir. Çalışmada dış borçlanma konusu arz tarafından çok talep yönüyle ele alınmış; ancak yeri geldikçe, mali ve iktisadi politikalar yanında uluslararası politikaların da aşırı borçlulukta rol oynadığına değinilmiştir. Yine bu çerçevede, popülist politikaların desteklenmesinin borç sarmallarının yeniden oluşmasına yol açabileceği belirtilmiş ve sözü edilen durumun geçmişteki örneklerine atıflarda bulunulmuştur. Gelişmekte olan ülkelerde dış borçlanma iktisadi ve mali politikalar perspektifinden kuramsal olarak incelendikten sonra belirleyici unsurları panel veri yöntemi ile ampirik olarak analiz edilmeye çalışmıştır. Test edilen modellerin ardından gelişmekte olan ülkelerde; GSYİH büyüme oranları, sabit sermaye oluşumu, nüfus, dış ticaret hadleri, sermaye kaçışları, dış borç servisleri, dış borç faiz ödemeleri, kentsel nüfus, kamu kesimi tüketim harcamaları ve finansal liberalizasyon değişkenlerinin dış borçlanmayı anlamada belirleyici olduğu sonucuna ulaşılmıştır. Anahtar Kelimeler: Dış Borçlanma, Gelişmekte Olan Ülkeler, Türkiye Ekonomisi, İktisadi ve Mali Yapı, Panel Veri Analizi Yöntemi.

This paper starts with the FDI (Foreign Direct Investments) impact analysis to main macroeconomic indicators (total investments, Gross fixed Capital Formation, GDP, exports, imports, real wage, external debt and external payments balance) in 1995 – 2004 period. There is a lack output trend of those indicators as result of the inconvenient evolution of the efficiency macroeconomic indicators. Also, this study analysis, the relationship between FDI, productivity and labours market related to FDI effects in home country.

La historia reciente en Argentina muestra significativas lecciones para el acontecer político, social y económico actual respecto de cambios en las principales instituciones que componen el capitalismo moderno. Es nuestro propósito observarla a la luz del concepto de régimen de acumulación. Nuestra preocupación seguirá los lineamientos de una crítica a las formas de acumulación de poder económico, que tiene su correlato en lo político.

Uno de los aspectos más relevantes del modelo económico que surgió a partir de las últimas elecciones presidenciales es, sin lugar a dudas, la vuelta del financiamiento por la vía del endeudamiento externo. Esta tercera ola de endeudamiento en divisas desde que empezó el ciclo neoliberal tiene algunos parecidos, y mu-chas diferencias, respecto de los dos primeros (1976/1983 y 1989/2001). Todos estos aspec-tos merecen ser analizados ya que inciden sobre las tendencias, sustentabilidad y crisis generadas por esa deuda. En ese sentido, trataremos de rea-lizar un análisis comparativo entre los tres ciclos de endeudamiento utilizando distintos indica-dores que puedan dar cuenta de la sustentabi-lidad y el carácter de la relación entre deudor y acreedor. Si bien el endeudamiento externo no es un fenómeno novedoso, desde la financiarización global de los´70los´70, en nuestro país se acentuó sig-nificativamente la utilización del mismo (tanto de forma pública como privada), como recur-so para financiar el proceso de acumulación y la fuga de capitales crónica. De esta manera, el sector financiero internacional fue el rector de nuestra dinámica económica, impulsando auges, precipitando caídas y, sobre todo, impo-niendo modelos. El acreedor no tiene por obje-tivo el desarrollo del deudor, sino que los recur-sos del mismo sean destinados al repago de la deuda. De ahí la insistencia en solicitar ajustes y libre movilidad de capitales: el pago de la deuda se vuelve prioritario por sobre los demás gastos, así como la libertad de reorientar la inversión. Esto significa una enorme libertad para la salida de fondos, que restringe su uso para inver-siones productivas, pero que además agigantan los problemas de falta de divisas en un contexto de pago de la deuda externa contraída anterior-mente. Lo antedicho implica que la restricción externa se convierte en un fenómeno financiero antes que un fenómeno real, dado que puede existir restricción de divisas con superávit co-mercial, algo que era impensable hasta el 1976. Vale la pena destacar que prácticamente no existen casos en la historia mundial de países que hayan alcanzado el desarrollo económico en base al acceso al mercado de capitales. Una de las posibles explicaciones de ello, puede basarse en las condiciones necesarias que debe cumplir un país deudor a fin de atraer capitales. Las po-líticas ortodoxas, usualmente, permiten asegu-rarle a los acreedores que de ser necesario al mo-mento de distribuir el excedente, ellos tendrán una posición prioritaria respecto al resto de los actores sociales. Por otro lado, para crecer to-mando deuda en divisas, la tasa a la cual se apa-lanca el país, debe ser menor al incremento que se generará en el flujo neto de dólares (el saldo de balanza comercial) como resultado de la in-versión realizada vía endeudamiento. ¿Qué sig-nifica esto? Que el destino del dinero prestado, debe garantizar un aumento del ingreso de las exportaciones, o ahorro de las importaciones, suficiente como para poder repagar el capital y los intereses. Lamentablemente, los flujos de divisas provenientes de las exportaciones en los países periféricos, son altamente inestables, ya que los precios de sus productos son muy voláti-les y no controlan los mercados de destino. Por lo tanto, la única opción sería tomar deuda para sustituir importaciones, como era la intención cuando el Estado compró YPF para reducir el déficit energético, o fomentar las exportaciones industriales. Este capítulo se divide en dos partes. La pri-mera, se propone analizar el recorrido histórico de la deuda externa en la Argentina desde 1976

Türkiye ekonomisi 2018 ortalarında bir döviz krizi ile karşı karşıya kalmış, ekonomi yavaşlamaya, enflasyon hızla artmaya ve borç ödemelerinde yaşanan sorunlar yoğunlaşmaya başlamıştır. Bu makalede, yaşanan bu gelişmelerin, 2000'li yıllarda Türkiye ekonomisine hâkim olan dış sermaye girişlerine bağımlı, borç artışına dayanan, inşaat odaklı büyüme modelinin yapısal bir krizi olduğu öne sürülecek, Türkiye ekonomisinin dış sermaye girişlerine bağımlı yapısı tartışıldıktan sonra, borç artışı ve inşaat odaklı büyüme tercihleri incelenecektir. 2000'li yıllar boyunca dış sermaye girişlerinde yaşanan artışla birlikte ekonominin ani duruş veya çıkışlara karşı kırılganlığını daha da artmıştır. Özel sektörün toplam dış borcundaki artış, hem bankacılık sektörünü hem de finansal olmayan işletmeleri döviz kurlarındaki oynamalara karşı kırılgan hale getirirken yurtiçi borçluluk oranlarındaki artış da ekonomik büyümenin faiz oranları ve kredi genişlemesindeki değişimlere oldukça duyarlı olmasına yol açmıştır. Türk lirasının reel olarak uzun süre değerli seyretmesi, üretimde ithal ara malı kullanımını arttırarak 2000'li yıllarda büyümenin yüksek cari açıklarla birlikte gerçekleşmesine neden olmuştur. Dolayısıyla dış sermaye girişlerine bağımlı, borç artışına dayanan, inşaat odaklı büyüme modeli iç ve dış şartlar olumlu olduğunda ekonomik büyüme yaratırken zaman içerisinde ekonomideki kırılganlıkları arttırmış ve ekonomik istikrarsızlığa zemin hazırlamıştır. Bu şartlar altında ortaya çıkan döviz ve borç krizi sonrası ekonominin seyrinin ana belirleyicisi küresel likidite şartlarındaki gelişmeler olacaktır.

This study set out to examine empirically the threshold analysis of the impact of external debt on the Nigerian economy from 1981-2013. The debt laffer curve which is an inverted-U curve, shows that at the rising part of the curve external debt accumulation will positively influence growth as the debt is sustainable while the falling aspect of the curve shows the problem of debt overhang as external debt becomes unsustainable leading to a negative impact on the economy due to fall in the prospect of economic growth and development. The existence of external debt laffer curve in Nigeria is a plausibility, therefore, external debt accumulation could have a positive or negative impact on the economy depending on whether the economy is operating above the optimum debt level or below the optimum debt level. Therefore, in an attempt to capture the nature of relationship between external debt and real gross domestic product a linear and a non-linear model is specified. Employing an autoregressive distributed lag model (ARDL) and ARDL-spline regression specifications to capture the linear and non-linear relationship respectively and an OLS estimation technique, results show that there exist no significant short-run but a long-run impact of external debt on the Nigerian economy. Also, it was observed that the linear specification is inadequate to capture the true relationship between external debt accumulation and Nigerian economy as a threshold effect of 61-67% is estimated. Meaning that there exist debt laffer curve in Nigeria which implies that above 61-67% of the real gross domestic product external debt accumulation would possibly show a problem of debt overhang as the debt becomes unsustainable thereby leading to a negative impact on the economy due to fall in the prospect of economic growth and development.