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Aviral Kumar Tiwari
''Debt Sustainability in India: Empirical Evidence Estimating Time-Varying Parameters''
( 2012, Vol. 32 No.2 )
We employed Fincke and Greiner's (2011, Studies in Nonlinear Dynamics & Econometrics) approach for testing sustainability of public debt in the case of India. Their approach was based on the framework of Bohn (1998) who showed how the primary surplus reacts to variations in debt and which has received great attention in economics literature recently. In this contribution, we applied that test to the India for the period 1970-2009, where we allowed for a time-varying reaction coefficient. We did not find the clear-cut result on the sustainability of public debt for the India during study period.
Keywords: Debt Sustainability, India, Time-Varying Parameters
JEL: E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General
H6 - National Budget, Deficit, and Debt: General
Manuscript Received : Dec 05 2011 Manuscript Accepted : Apr 06 2012

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