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Inflation in Pakistan Revisited

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  • Ashfaque H. Khan

    (Pakistan Institute of Development Economics, Islamabad.)

  • Mohammad Ali Qasim

    (Pakistan Institute of Development Economics, Islamabad.)

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    Abstract

    A notable development in recent years in Pakistan's economic scene has been the sharp pickup in the rate of inflation. In particular, Pakistan has experienced sustained inflation (changes in the CPI) hovering between 11.0 to 13.0 percent range during the last three years (1993-94 to 1995-96). The persistence of inflation at double-digit rates over the three successive years has attracted considerable attention of academics and policy-makers. Not surprisingly, one of the thorniest issues in Pakistan's policy arena today is how to put inflation under effective control. Recent studies on inflation in Pakistan broadly agree on the key factors influencing the rate of inflation, namely, the growth in money supply, the supply side bottlenecks, the adjustment in government-administered prices, the imported inflation (exchange rate adjustment), escalations in indirect taxes, and inflationary expectations. However, these studies do not concur on the relative importance of each of these factors as determinants of inflation. While Nasim (1995) and Hossain (1990) find money supply as the principal factors underlying the rising inflation rate in Pakistan, others suggest that food prices followed by government administered fuel/energy prices and indirect taxation are the primary impetus for the upward inflationary spira1.

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    Bibliographic Info

    Article provided by Pakistan Institute of Development Economics in its journal The Pakistan Development Review.

    Volume (Year): 35 (1996)
    Issue (Month): 4 ()
    Pages: 747-759

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    Handle: RePEc:pid:journl:v:35:y:1996:i:4:p:747-759

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    Cited by:
    1. S. Adnan & H.A.S. BUKHARI & Safdar Ullah KHAN, 2008. "Does Volatility In Government Borrowing Leads To Higher Inflation? Evidence From Pakistan," Journal of Applied Economic Sciences, Spiru Haret University, Faculty of Financial Management and Accounting Craiova, vol. 3(3(5)_Fall), pages 187-202.
    2. Rizvi, Syed Kumail Abbas & Naqvi, Bushra, 2008. "Asymmetric Behavior of Inflation Uncertainty and Friedman-Ball Hypothesis: Evidence from Pakistan," MPRA Paper 19488, University Library of Munich, Germany.
    3. Mohsin S. Khan & Axel Schimmelpfennig, 2006. "Inflation in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 45(2), pages 185-202.
    4. Saira Tufail & Sadia Batool, 2013. "An Analysis of the Relationship between Inflation and Gold Prices: Evidence from Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 18(2), pages 1-35, July-Dec.
    5. Khalid Mushtaq & Abdul Ghafoor & Abedullah & Farhan Ahmad, 2011. "Impact of Monetary and Macroeconomic Factors on Wheat Prices in Pakistan: Implications for Food Security," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 16(1), pages 95-110, Jan-Jun.
    6. Inayat Ullah Mangla, 2011. "Reconstructing the Performance of Pakistan’s Political Economy: Another Paradigm," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 16(Special E), pages 30-70, September.
    7. Rizvi, Syed Kumail Abbas & Naqvi, Bushra, 2009. "Inflation Volatility: An Asian Perspective," MPRA Paper 19489, University Library of Munich, Germany.
    8. Khan, Rana Ejaz Ali & Gill, Abid Rashid, 2007. "Impact of Supply of Money on Food and General Price Indices: A Case of Pakistan," MPRA Paper 16293, University Library of Munich, Germany.
    9. Khan, Safdar Ullah & Saqib, Omar Farooq, 2008. "Political Instability and Inflation in Pakistan," MPRA Paper 13056, University Library of Munich, Germany, revised 02 Jan 2009.
    10. Qayyum, Abdul, 2008. "Does Monetary Policy Play Effective Role in Controlling Inflation in Pakistan," MPRA Paper 13080, University Library of Munich, Germany.
    11. Syed Kumail Abbas Naqvi & Bushra Naqvi, 2010. "Asymmetric Behavior of Inflation Uncertainty and Friedman-Ball Hypothesis: Evidence from Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 15(2), pages 1-33, Jul-Dec.
    12. Nadia Saleem, 2008. "Measuring Volatility of Inflation in Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 13(2), pages 99-128, Jul-Dec.

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