TITLE:
Public Debt and Economic Growth of Nepal
AUTHORS:
Tara Prasad Upadhyaya, Tonik Pun
KEYWORDS:
Public Debt, Economic Growth, Vector Auto Regression, Multivariate Grange Causality
JOURNAL NAME:
Journal of Financial Risk Management,
Vol.11 No.2,
June
29,
2022
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.