A Nexus between Institutional Quality, Debt Burden, Exchange Rate Depreciation, Foreign Remittances and Distribution of Income. A Time Series Data Analysis for Pakistan

Abstract

As a result of the economic crisis in Pakistan, debt has had a negative impact on life and is perhaps one of the biggest causes of rising deprivation over the decades. This study examines the impact of debt services on income distribution in Pakistan, analyzed with time-series data from 1984 to 2018. This has shown that currency devaluation is a threat to income distribution in developing countries. The previous analysis shows that international remittances to developing countries have a positive effect. The Autoregressive Distributed Lags (ARDL) was the method used to examine the impact of debt on income distribution. The findings illustrate the significant and positive relationship between debt service and Gini Coefficient Index, which shows that an increase in debt will result in an increase in income distribution.