Paper Title
Can Pakistan Raise More External Debt? A Fiscal Reaction Approach

Abstract
This study investigates the external debt sustainability of Pakistan through fiscal reaction function. We have also explored the sustainable potentialdebt which can be raised given macroeconomic conditions of Pakistan economy. Using annual data from 1980 to 2017 and employing autoregressive distributed lag (ARDL) model,our results show that Pakistan’s external debt is sustainablein the long run as fiscal reaction function analysis exhibits significantly positive relationship between primary balance and external debt to GDP ratio. However, debt sustainability potential result shows that Pakistan has exhausted its debt potential and any further debt accumulation may lead to debt crisis.