Abstract
Generally, macroeconomic disequilibrium is the cause of foreign borrowing. Foreign borrowing permits a country to maintain domestic investment at levels beyond those that could be financed through domestic saving alone. It is this imbalance of domestic saving and investment that generates the external debt. Like many developing countries, Yugoslavia borrowed abroad to supplement her domestic savings to increase investments and accelerate her growth.
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Note and References
The source for the Yugoslav GMP is the World Development Report of the World Bank 1985–86. For 1983 the ratio D/GMP was 20.571/46.890 and for 1984 D/GMP was 20.191/38.990.
Babić, M., Medjunarodna ekonomija (International Economics), Privredni vjesnik, Zagreb: 1986.
Babic, M. and E. Primorac, ‘Some Causes of the Growth of the Yugoslav External Debt’, Soviet Studies, no. 1, January 1986.
Cline, W. R., International Debt: Systemic Risk and Policy Response, Institute for International Economics, Washington, DC, 1984.
Dornbusch, R. and S. Fischer, The World Debt Problem, Cambridge, Massachusetts, MIT, 1984.
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© 1989 H. W. Singer and Soumitra Sharma
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Babić, M. (1989). Yugoslav External Debt: a Constraint for Macroeconomic Policy. In: Singer, H.W., Sharma, S. (eds) Economic Development and World Debt. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-20044-3_17
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DOI: https://doi.org/10.1007/978-1-349-20044-3_17
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