Published on October 9, 2019 – Updated on November 26, 2019

Focus on Research

Does External Financing Drive Growth?

Evidence for the growth impact of external financing remains open. This article revisits the question for a large sample of developing economies. Financial inflows can directly support economic growth by relaxing constraints on domestic resources, but can also indirectly weaken growth by hampering competitiveness through a real appreciation of the exchange rate.

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