Impact of trade openness and external debt on economic growth. New Evidence from Various Regions

      Аннотация: Do lesser obstacles to international trade and more external debt encourage an optimistic result on economic growth? This has been a burning topic within the ground of economics for more than a century. The most important purpose of this research is to investigate the impact of trade openness and external debt on wide-reaching economic growth. Panel regression has been used for the analysis purpose.Conclusion of the research indicates a positive relationship between trade openness and economic growth but negative association between foreign debt and economic growth of regions. On the basis of the empirical results acquired, it is strongly recommended to policy makers and economists to provide new horizons for lesser trade barriers. However, we conclude that macroeconomic instabilities, economic factors like inflation, unemployment and government expenditures are the main source of explaining economic growth in the long run.Furthermore external debt is an essential factor for economic growth in the developing countries. Even then it is considered as burden for the economic health of that state.

Ключевые слова: Economic growth, external debt, Hausman Test, Trade Openness, Fixed and Random Effect