Theoretical Aspects of Growth in Developing Countries: External Debt Dynamics and the Role of Human Capital

A simple aggregate growth model, capable of assessing the impact of macroeconomic policies on the long-term performance of a developing country, is formulated. The model emphasizes expenditures on the improvement of human capital and the dynamics of external debt, and it yields empirically testable hypotheses on the relative importance of various determinants of long-term growth performance. The analytical results have several implications relevant to strategies of economic growth.