PERSISTENT FISCAL DEFICIT AS A DETERMINANT OF  INFLATION IN SRI LANKA: ARDL APPROACH

Alwis, T.D.; Dewasiri, J.N.

dc.contributor.author	Alwis, T.D.
dc.contributor.author	Dewasiri, J.N.
dc.date.accessioned	2023-02-02T09:52:37Z
dc.date.available	2023-02-02T09:52:37Z
dc.date.issued	2022-11-16
dc.identifier.issn	978-624-5727-25-4
dc.identifier.uri	http://repo.lib.sab.ac.lk:8080/xmlui/handle/susl/3334
dc.description.abstract	Fiscal deficit is an important issue in developing countries as it can have impacts on macroeconomic variables such as inflation. The present study examined the persistence of fiscal deficit as a determinant of inflation and focused on long-run co-integration between inflation and fiscal deficits in Sri Lanka from 1977-2019. Inflation was taken as the dependent variable and the study was based on autoregressive distributed lag (ARDL) to investigate the long-run relationships among the variables and the error correction model (ECM) to examine short-run dynamics. The co-integration among the variables was indicated through the bound test approach when inflation was the dependent variable. The bound test suggested the presence of co integration among the variables when inflation is taken as the dependent variable and hence the long-run relationship between inflation and fiscal deficit in Sri Lanka. The policymakers should think of increasing the revenue through taxes in order to bridge the fiscal deficit.	en_US
dc.language.iso	en_US	en_US
dc.publisher	Faculty of Management Studies Sabaragamuwa University of Sri Lanka, Belihuloya	en_US
dc.subject	ARDL	en_US
dc.subject	Co-integration	en_US
dc.subject	Error Correction	en_US
dc.subject	Fiscal deficit	en_US
dc.subject	Imports	en_US
dc.subject	Inflation	en_US
dc.subject	Nominal wage rates	en_US
dc.title	PERSISTENT FISCAL DEFICIT AS A DETERMINANT OF INFLATION IN SRI LANKA: ARDL APPROACH	en_US
dc.type	Article	en_US