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THE ANALYSIS OF DEBTTHRESHOLD EMPIRICAL EVIDENCE FROM PAKISTAN

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54 Pages : 531-539

http://dx.doi.org/10.31703/gssr.2021(VI-I).54      10.31703/gssr.2021(VI-I).54      Published : Mar 2021

The Analysis of Debt-Threshold: Empirical Evidence from Pakistan

Abstract

    This paper intends to analyze the debt threshold for Pakistan over a period of 1976-2020 within the framework of the ARDL bounds testing approach. ADF and PP tests of stationarity confirmed that the extracted data set was stationarity either at level or at first difference. The F-bound test validated the presence of long-run co integration. This paper finds that the curve for the bi variate quadratic function is strictly concave and that the debt in flexion point is 48.42 percent of the gross domestic product. It implies that the marginal effect of debt turns negative beyond this level of debt. Findings suggest that government should ensure to acquire external debt up to the debt-in flexion point that would enhance the economic growth. Government should also work on fiscal consolidation and substituting the required burden of debt with alternate sources of revenue like FDI, grants, and international trade.

    (1) Minhajuddin
    Department of Economics, Faculty of Business and Economics, Abdul Wali Khan University Mardan, KP, Pakistan.
    (2) Brekhana Gul
    Lecturer, Department of Economics, Faculty of Business and Economics, Adul Wali Khan University, Mardan, KP, Pakistan.
    (3) Muhammad Sohail Alam Khan
    Lecturer, Department of Economics, Faculty of Business and Economics, Adul Wali Khan University, Mardan, KP, Pakistan.
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Cite this article

APA

CHICAGO

    CHICAGO : Minhajuddin, , Brekhana Gul, and Muhammad Sohail Alam Khan. 2021. "The Analysis of Debt-Threshold: Empirical Evidence from Pakistan." Global Social Sciences Review, VI (I): 531-539 doi: 10.31703/gssr.2021(VI-I).54

HARVARD

    HARVARD : MINHAJUDDIN., GUL, B. & KHAN, M. S. A. 2021. The Analysis of Debt-Threshold: Empirical Evidence from Pakistan. Global Social Sciences Review, VI, 531-539.

MHRA

    MHRA : Minhajuddin, , Brekhana Gul, and Muhammad Sohail Alam Khan. 2021. "The Analysis of Debt-Threshold: Empirical Evidence from Pakistan." Global Social Sciences Review, VI: 531-539

MLA

    MLA : Minhajuddin, , Brekhana Gul, and Muhammad Sohail Alam Khan. "The Analysis of Debt-Threshold: Empirical Evidence from Pakistan." Global Social Sciences Review, VI.I (2021): 531-539 Print.

OXFORD

    OXFORD : Minhajuddin, , Gul, Brekhana, and Khan, Muhammad Sohail Alam (2021), "The Analysis of Debt-Threshold: Empirical Evidence from Pakistan", Global Social Sciences Review, VI (I), 531-539

TURABIAN

    TURABIAN : Minhajuddin, , Brekhana Gul, and Muhammad Sohail Alam Khan. "The Analysis of Debt-Threshold: Empirical Evidence from Pakistan." Global Social Sciences Review VI, no. I (2021): 531-539. https://doi.org/10.31703/gssr.2021(VI-I).54