The Impact of External Public Debt on Economic Development in Developing Countries from 2000 to 2015

Abstract

The aim of the research is to investigate effect of external public debt on economic development of countries with transition economies. The countries with transitions economies are highly dependent on external aid and tend to have high external public debt. The period time 2000-2015 is studied as for this time span data are available for all variables. Data of the World Bank and the OECD are used for the research. The research question is to determine the level of impact of external public debt on GDP growth. Econometric model used for this research is panel data and estimated by two methods, fixed effect and GMM system proposed by Arellano and Bover. The results of estimation are analysed for policy implications.