Nexus Between External Debt, Economic Growth, Inflation, Human Capital, and Tobacco Industry

Abstract

The growing stock of external debt has increased concerns about whether external debt can help to enhance the economic growth or whether it possible to bear the burden of future generation. Tobacco industry also contributing a role in capital formation, It depends upon the situation that whether country is in position to repay the debt payment or country already trapped in debt overhang position. The objective of this study was to found that what the impact of external on economic growth in Pakistan. 37 years data was used in this study for Pakistan from 1981 to 2017 from World Development Indicators. Variables were stationary at first difference and were co-integrated to each other according Johansen Co-integrated test. Vector Error Correction Model was used in this study. Results showed that external debt has negative impact on economic growth in long run as well as in short run.