The Impact of International Remittances on Public Debt Sustainability in Kerala

Evidence from the FMOLS Approach

Datos Bibliográficos

ID6170293
AutoresA Sabu (0000-0002-9210-7176, Christ University), Vineeth Mohandas (0000-0001-8311-4887, Christ University)
Año2025
Volumen16
Número3
Páginas331-358
Fecha de publicación2025-09-19
Peer ReviewedSí
Open AccessSí
TipoARTICLE
RevistaStatistics Politics and Policy (JOURNAL)
Identificadores de la revistaISSN: 2151-7509 • E-ISSN: 2194-6299
EditorialDe Gruyter (PUBLISHER • DE)
DOI10.1515/spp-2025-0004
OpenAlexW4414362880
IdiomaEN
Citas recibidas1
Referencias 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