THE RELATIONSHIP BETWEEN EXTERNAL PUBLIC DEBT AND ECONOMIC GROWTH: AS A CASE OF UZBEKISTAN
Akmal Allakuliev, Fayzullokh Sattoriy
Senior teacher, Tashkent State University of Economics
This study investigates the relationship between external debt and economic growth in the Uzbekistan during the period 2010â€“2020. Two-step Engle and Granger Cointegration method is employed to determine the cointegration relationship between external debt and GDP growth. Our findings show that there is a negative significant relationship between external debt and economic growth. We can also observe that a 1% increase in external debt will lead to a 24% decrease in GDP growth. Also the results of ECM model suggests that if economic shocks and periodic downturn occur in GDP as a result of external debt, then 86.0% will return to its equilibrium in each subsequent short period. This suggests that GDP growth may return to its equilibrium after a period of 1.17 (1/86) from debt crisis and shocks.
Keywords: economic growth, cointegration, debt overhang, external public debt, error correction model
Journal Name :
EPRA International Journal of Research & Development (IJRD)
Published on : 2022-04-05