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EVALUATING THE RELATIONSHIP AND SUSTAINABILITY OF PUBLIC DEBT FOR SAARC COUNTRIES

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03 Pages : 24-40

http://dx.doi.org/10.31703/ger.2021(VI-II).03      10.31703/ger.2021(VI-II).03      Published : Jun 2021

Evaluating the Determinants and Sustainability of Public Debt for the South Asian Association for Regional Cooperation (SAARC) Countries

Abstract

    This study examines the sustainability and relationship of public debt to selected macroeconomic variables for South Asian Association of Regional Cooperation (SAARC) countries from 1996 to 2017. For the relationship of public debt to macroeconomic variables, we employ a panel Autoregressive Distributed Lagged (ARDL) model. For sustainability measurement of public debt, we used a theoretically derived model based on necessary and sufficient conditions. The panel ARDL results for the long run show that the savinginvestment gap and economic growth negatively while the budget deficit and current account positively explain public debt. The sustainability measurement results based on necessary and sufficient conditions reveal that public debt remains unsustainable for most of the years in the presence of macroeconomic variables. It is recommended that countries in this association should formulate policies that promote saving culture. This saving culture may not only promote investment but also can affect the current account situation of these countries.

    Public Debt, Macroeconomic Variables, Panel ARDL, Sustainability, SAARC Countries

    (1) Ayaz khan
    PhD Scholar, Department of Economics, Abdul Wali Khan University Mardan, KP, Pakistan.
    (2) Zahoor ul Haq
    Professor, Department of Economics, Pakhtunkhwa Economic Policy Research Institute, Abdul Wali Khan University Mardan, KP, Pakistan.
    (3) Javed Iqbal
    Assistant Professor, Department of Economics, Pakhtunkhwa Economic Policy Research Institute, Abdul Wali Khan University Mardan, KP, Pakistan.
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Cite this article

APA

    APA : khan, A., Haq, Z. u., & Iqbal, J. (2021). Evaluating the Determinants and Sustainability of Public Debt for the South Asian Association for Regional Cooperation (SAARC) Countries. Global Economics Review, VI(II), 24-40. https://doi.org/10.31703/ger.2021(VI-II).03

CHICAGO

    CHICAGO : khan, Ayaz, Zahoor ul Haq, and Javed Iqbal. 2021. "Evaluating the Determinants and Sustainability of Public Debt for the South Asian Association for Regional Cooperation (SAARC) Countries." Global Economics Review, VI (II): 24-40 doi: 10.31703/ger.2021(VI-II).03

HARVARD

    HARVARD : KHAN, A., HAQ, Z. U. & IQBAL, J. 2021. Evaluating the Determinants and Sustainability of Public Debt for the South Asian Association for Regional Cooperation (SAARC) Countries. Global Economics Review, VI, 24-40.

MHRA

    MHRA : khan, Ayaz, Zahoor ul Haq, and Javed Iqbal. 2021. "Evaluating the Determinants and Sustainability of Public Debt for the South Asian Association for Regional Cooperation (SAARC) Countries." Global Economics Review, VI: 24-40

MLA

    MLA : khan, Ayaz, Zahoor ul Haq, and Javed Iqbal. "Evaluating the Determinants and Sustainability of Public Debt for the South Asian Association for Regional Cooperation (SAARC) Countries." Global Economics Review, VI.II (2021): 24-40 Print.

OXFORD

    OXFORD : khan, Ayaz, Haq, Zahoor ul, and Iqbal, Javed (2021), "Evaluating the Determinants and Sustainability of Public Debt for the South Asian Association for Regional Cooperation (SAARC) Countries", Global Economics Review, VI (II), 24-40

TURABIAN

    TURABIAN : khan, Ayaz, Zahoor ul Haq, and Javed Iqbal. "Evaluating the Determinants and Sustainability of Public Debt for the South Asian Association for Regional Cooperation (SAARC) Countries." Global Economics Review VI, no. II (2021): 24-40. https://doi.org/10.31703/ger.2021(VI-II).03