Low Regime (State 1) of Fiscal Deficit Financing

Variables

Coefficient

$\left|Z\right|$

Inflation (−1)

0.769***

57.58

Budget Deficit financing

0.346***

3.54

Broad Money Supply (M2) Growth

0.012

0.49

Real GDP Growth

−0.987***

−5.12

Imports Capacity

0.0005***

4.79

Exchange Rate

−0.713

−1.55

Interest Rate

0.125***

3.45

High Regime (State 2) of Fiscal Deficit Financing

Variables

Coefficient

$\left|Z\right|$

Inflation (−1)

0.777***

26.31

Budget Deficit financing

0.882***

6.99

Broad Money Supply (M2) Growth

0.065**

2.06

Real GDP Growth

0.249

1.08

Imports Capacity

−0.0002

−0.92

Exchange Rate

0.860**

1.97

Interest Rate

0.323***

6.18