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Asymmetric impact of external debt on economic growth in Croatia: nonlinear autoregressive distributed lag approach”

This paper brings the external debt effect on economic growth in in Croatia based on the autoregressive distributed lag approach and quarterly data over the 2000 - 2016 period. The research results revealed asymmetric and positive impact of external debt on economic growth in a long run while the short-run effect appeared to be negative. The effect from external debt reduction was not found to be significant in the long as well as in the short run. The research outlines that Croatian economy is highly indebted and experienced positive effects from external indebtedness. However, external debt reduction should not damage economic growth in Croatia.

external debt, economic growth, NARDL

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