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Public Debt and External Debt Sustainability among BRICS Countries

Author

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  • Magulsha George

    (Research Scholar (Corresponding Author), Madras School of Economics, Gandhi Mandapam Road, Chennai-600 025 (India))

  • K. R. Shanmugam

    (Director and Professor, Madras School of Economics, Gandhi Mandapam Road, Chennai)

Abstract

This study analyses an important policy issue pertaining to the public debt and external debt of BRICS nations from 1993 to 2020 using the Bohn framework and a penalized spline estimation method. The results indicate that, as the primary surplus reacts positively and significantly to public debt in China and South Africa, the debt is sustainable in these nations. In Brazil, India and Russia, the debt is not sustainable. The external debt policy is sustainable only in China and not in other BRICS nations. These results suggest immediate policy interventions in Brazil, India and Russia to achieve sustainable levels of public debt and external debt. We hope that these results will be useful to policy makers and other stake holders to take appropriate strategies to improve the public debt and external debt position of BRICS nations and make them sustainable.

Suggested Citation

  • Magulsha George & K. R. Shanmugam, 2023. "Public Debt and External Debt Sustainability among BRICS Countries," Working Papers 2023-253, Madras School of Economics,Chennai,India.
    • Handle: RePEc:mad:wpaper:2023-253
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    More about this item

    Keywords

    Sustainable Debt; BRICS; Bohn Model; Penalized Spline.;
    All these keywords.

    JEL classification:

    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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