Economic Development and World Debt pp 219-224 | Cite as
Yugoslav External Debt: a Constraint for Macroeconomic Policy
Chapter
Abstract
Generally, macroeconomic disequilibrium is the cause of foreign borrowing. Foreign borrowing permits a country to maintain domestic investment at levels beyond those that could be financed through domestic saving alone. It is this imbalance of domestic saving and investment that generates the external debt. Like many developing countries, Yugoslavia borrowed abroad to supplement her domestic savings to increase investments and accelerate her growth.
Keywords
Real Interest Rate Macroeconomic Policy Domestic Investment External Debt Debt Service
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Note and References
- 1.The source for the Yugoslav GMP is the World Development Report of the World Bank 1985–86. For 1983 the ratio D/GMP was 20.571/46.890 and for 1984 D/GMP was 20.191/38.990.Google Scholar
- Babić, M., Medjunarodna ekonomija (International Economics), Privredni vjesnik, Zagreb: 1986.Google Scholar
- Babic, M. and E. Primorac, ‘Some Causes of the Growth of the Yugoslav External Debt’, Soviet Studies, no. 1, January 1986.Google Scholar
- Cline, W. R., International Debt: Systemic Risk and Policy Response, Institute for International Economics, Washington, DC, 1984.Google Scholar
- Dornbusch, R. and S. Fischer, The World Debt Problem, Cambridge, Massachusetts, MIT, 1984.Google Scholar
Copyright information
© H. W. Singer and Soumitra Sharma 1989