Old Wine in New Bottles: Saving – Growth Nexus: Innovative Accounting Technique in Pakistan
AbstractThe paper re-investigates the relationship between economic growth and domestic savings by applying new approaches rather than old techniques. The cointegration and causality approaches have been applied for economic growth and domestic savings. In doing so, ARDL Bounds Testing, Johanson cointegration approaches are employed to examine for long run association while Innovative Accounting Techniques and Toda and Yamamoto (1995) for causal relationship has been applied. Ng-Perron de-trended test is used for order of integration of running actors. Results reveal that there exists a long run relationship between economic growth and domestic savings and their association is robust at least in long span of time. Causal results through innovative accounting technique assert that there is oneway causality running from economic growth to domestic savings while very weak from opposite side. Results by Toda and Yamamoto’s technique also confirm that economic growth leads domestic savings in Pakistan.
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Bibliographic InfoArticle provided by Asociatia Generala a Economistilor din Romania - AGER in its journal Theoretical and Applied Economics.
Volume (Year): 7(548) (2010)
Issue (Month): 7(548) (July)
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economic growth; savings; causality; ARDL.;
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- Muhammad Shahbaz & Faridul Islam & Naveed Aamir, 2012.
"Is devaluation contractionary? Empirical evidence for Pakistan,"
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34162, University Library of Munich, Germany, revised 16 Oct 2011.
- Muhammad Shahbaz & Muhammad Shahbaz Shabbir & Muhammad Sabihuddin Butt, 2013. "Effect of financial development on agricultural growth in Pakistan: New extensions from bounds test to level relationships and Granger causality tests," International Journal of Social Economics, Emerald Group Publishing, vol. 40(8), pages 707-728, June.
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"Do Imports and Foreign Capital Inflows Lead Economic Growth? Cointegration and Causality Analysis in Pakistan,"
29805, University Library of Munich, Germany, revised 24 Mar 2011.
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- Tang, Chor Foon & Tan, Bee Wah, 2014. "A revalidation of the savings–growth nexus in Pakistan," Economic Modelling, Elsevier, vol. 36(C), pages 370-377.
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