2025/09/19 by A. Sabu, Vineeth Mohandas · 1 voice
Economics, Econometrics and Finance · #Fiscal Policy and Economic Growth #Global Financial Crisis and Policies #Monetary Policy and Economic Impact
paper · doi:10.1515/spp-2025-0004
openalex publication_date 2025/09/19 · openalex created_date 2025/10/10 · openalex updated_date 2026/06/26
Abstract 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.