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| Author: | Cohen, D. |
| Title: | Low investment and large LDC debt in the 1980's. |
| Journal: | American Economic Review
1993 : JUN, VOL. 83:3, p. 437-449 |
| Index terms: | INVESTMENT DEBT DEVELOPING COUNTRIES |
| Language: | eng |
| Abstract: | Large debt was not an unconditional predictor of low investment in the 1980's, nor was investment abnormally low, when compared to a "financial-autarky" rate, calculated in the text. Actual service of the debt crowded out investment. For the rescheduling countries 1 percent of GDP paid abroad reduced domestic investment by 0.3 percent of GDP. This is identical to the correlation between investment and foreign finance observed in the 1960's. |
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