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Public Debt and Economic Growth of Nepal
Lumbini Banijya Campus, Affiliated to Tribhuvan University, Kathmandu, Nepal
Lumbini Banijya Campus, Butwal, Nepal
- 1 Lumbini Banijya Campus, Affiliated to Tribhuvan University, Kathmandu, Nepal
- 2 Lumbini Banijya Campus, Butwal, Nepal
Journal of Financial Risk Management·Volume 11 (2022)·Pages 353–384·Published 2 April 2022·DOI10.4236/jfrm.2022.112019
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Abstract
The economy of Nepal has been characterized by a high level of public debt coinciding with a higher level of resource gap and deficit balance of payment for a long period of time which is indicative of debt overhang. This paper investigates the effect of public debt on the economic growth of Nepal using annual time - series data from the period 1978 to 2020. The study is based on an unrestricted Vector Auto regression model, which captures Multivariate Granger Causality between the variables. The result from the analysis reveals that there is no significant causal relationship between public debts and to the economic growth of Nepal.
KeywordsPublic DebtEconomic GrowthVector Auto RegressionMultivariate Grange Causality
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