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Title: Economic Growth and External Debt Servicing: A Cointegration Analysis for the Case of Sri Lanka
Contributor(s): Wijeweera, Albert  (author); Dollery, Brian Edward  (author); Pathberiya, Palitha (author)
Publication Date: 2007
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Abstract: In the immediate aftermath of the tsunami disaster, many of Sri Lanka's creditor nations granted debt write-offs and interest-free periods on loans to assist the reconstruction process. Two macroeconomic effects stem from excessive external debt; a debt overhang problem and a credit-rationing problem. Using econometric analysis and Sri Lankan data for the period 1952 to 2002, this paper investigates whether Sri Lanka faces a debt overhang problem. Long-run estimations rely on cointegration methodology whereas short-run analysis employs an error correction method. The results indicate that Sri Lanka does not have a debt overhang problem, probably because total external indebtedness is not too high.
Publication Type: Journal Article
Source of Publication: Indian Journal of Economics & Business, 6(1), p. 93-102
Publisher: Serials Publications
Place of Publication: India
ISSN: 0972-5784
Field of Research (FOR): 140202 Economic Development and Growth
Socio-Economic Objective (SEO): 910101 Balance of Payments
Peer Reviewed: Yes
HERDC Category Description: C1 Refereed Article in a Scholarly Journal
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