External debt and economic growth in Latin America and the Caribbean

ALFREDO SCHCLAREK; FERNANDO TOLEDO ; LOUIS-PHILIPPE ROCHON

Monetary Policy Challenges in Latin America

Edward Elgar Publishing Limited

Lugar: Cheltenham; Año: 2023; p. 232 - 257

This chapter empirically explores the relationship between external debt and growth for 20 Latin American and Caribbean countries. Using a dynamic system generalized method of moments (GMM) panel estimator, we find that higher (lower) total external debt levels are associated with lower (higher) growth rates, and that this negative relationship is driven by the incidence of public external debt levels, and not by private external debt levels. We do not find evidence of non-linear effects for these relationships.