The Impact of International Remittances on Public Debt Sustainability in Kerala

Evidence from the FMOLS Approach

Dados Bibliográficos

ID6170293
AutoresA Sabu (0000-0002-9210-7176, Christ University), Vineeth Mohandas (0000-0001-8311-4887, Christ University)
Ano2025
Volume16
Fascículo3
Páginas331-358
Data de publicação2025-09-19
Peer ReviewedSim
Open AccessSim
TipoARTICLE
PeriódicoStatistics Politics and Policy (JOURNAL)
Identificadores do periódicoISSN: 2151-7509 • E-ISSN: 2194-6299
EditoraDe Gruyter (PUBLISHER • DE)
DOI10.1515/spp-2025-0004
OpenAlexW4414362880
IdiomaEN
Citações recebidas1
Referências citadas43

Remittances from Kerala’s migrant workers and professionals constitute a vital financial inflow, surpassing their relative significance in most other Indian states. With public debt nearing 60 % of NSDP, these transfers offer a potential buffer for debt sustainability. Applying Oates’ theory within Bohn’s debt-sustainability framework using an FMOLS model, and validated through Johansen testing, this study examines the remittance–debt nexus from 1980 to 2023. FMOLS results indicate a deterioration of debt sustainability despite substantial remittance inflows. The findings emphasize the need to reduce market borrowings, enhance the fiscal role of remittances, and promote policies supporting formal transfer channels, source diversification, remittance-linked investment, and financial literacy among migrant households to strengthen Kerala’s long-term fiscal resilience and enable more productive use of remittances

Fiscal Policy and Economic Growth · Global Financial Crisis and Policies · Monetary Policy and Economic Impact