Research Article Open Access

The Relaxing of Capital Controls and Rise of External Debt

Chokri Zehri1
  • 1 Al Baha International College of Sciences, Saudi Arabia

Abstract

This paper examines the impact of capital account liberalization on the external debt.  The study is made for a panel of eight countries of South Mediterranean Countries (SMCs) over the period 1971 to 2015. We use different models to explain the growth of external debt. We find that capital account liberalization is negatively correlated with external debt. We also find that the macroeconomic instability has an important role in the rise of external debt.

American Journal of Economics and Business Administration
Volume 9 No. 4, 2017, 61-70

DOI: https://doi.org/10.3844/ajebasp.2017.61.70

Submitted On: 27 July 2017 Published On: 11 December 2017

How to Cite: Zehri, C. (2017). The Relaxing of Capital Controls and Rise of External Debt. American Journal of Economics and Business Administration, 9(4), 61-70. https://doi.org/10.3844/ajebasp.2017.61.70

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Keywords

  • External Debt
  • Capital Account
  • Liberalization
  • South Mediterranean Countries