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External Debts and Economic Growth in Tanzania
(Review of Integrative Business and Economics Research, 2019) Marobhe, M.I
This study examines the relationship between external debts and economic growth in Tanzania using time series data from (1970-to 2015). The ordinary least squares multiple regression analysis was conducted and the results revealed a significant positive relationship between external debt and economic growth. The Granger causality test was also carried out and the results provided evidence of causality between external debts and economic growth in Tanzania. Furthermore, results from the Johansen Co-integration test also provide evidence of the existence of long-run association/co-integration between external debt and economic growth. So, this study provides evidence that may help to reach a conclusion that external debts have aided to stimulate economic growth in Tanzania. However, caution must be taken to keep external debts at an optimal level to avoid debt overhang which can have detrimental effects on the economy.