Public debt and economic growth in India: A reassessment

Bal, D P and Rath, Badri Narayan (2014) Public debt and economic growth in India: A reassessment. Economic Analysis and Policy, 44 (3). pp. 292-300. ISSN 0313-5926

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Abstract

This paper examines the effect of public debt on economic growth in India between 1980 and 2011. Using the autoregressive distributed lag ARDL model, the paper traces a long-run equilibrium relationship between public debt and economic growth. The error correction model (ECM) results show that central government debt, total factor productivity (TFP) growth, and debt-services are affecting the economic growth in the short-run, and that the results are consistent with our a priori expectation. It is recommended that the government should follow the objective of inter-generational equity in fiscal management over the long term in order to stabilize debt-GDP ratio, particularly, after the global financial crisis.

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IITH Creators:	IITH Creators ORCiD Rath, Badri Narayan http://orcid.org/0000-0001-7211-0952
Item Type:	Article
Uncontrolled Keywords:	ARDL; Debt service; Domestic debt; Economic growth; External debt; TFP growth
Subjects:	Social sciences > Business Finance
Divisions:	Department of Liberal Arts
Depositing User:	Team Library
Date Deposited:	05 Nov 2014 11:05
Last Modified:	11 Sep 2017 06:56
URI:	http://raiithold.iith.ac.in/id/eprint/626
Publisher URL:	https://doi.org/10.1016/j.eap.2014.05.007
Related URLs:	Google Scholar

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