Impact of Public Debt on Economic Growth in Case of India: A Co-Integration Based Study
Keywords:
Public debt, Economic growth, ARDL bound testAbstract
The present study has investigated the impact of public debt on economic growth from the period of 1990 to 2017. We applied data on public debt (internal &external) and per capita income as a proxy for economic growth. ARDL co-integration test has been used in this study to check long-run relationship between the variables. The co-integration test verified long-run relationship between public debt and economic growth. Public debt has significant impact on economic growth in long-run as well as short-run. The study also used Granger causality test which ravelled unidirectional causality. Only debt caused economic growth.
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