This paper tests the spillover effect of the foreign capital inflows on the long run growth under conditions of international economic exposure to foreign exchange rate fluctuations. The paper utilizes a simple open economy version of the Solow growth model with main features of real business...

The structure of this paper is to examine the effects of the interruption of foreign borrowings as an external shock on the time path of the economic growth rate of South Africa. In this paper, I examine the open economy version of both the Solow and the Ramsey growth models. In addition, I also...