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Economic Growth and Its Determinants in Pakistan

Author

Listed:
  • Muhammad Shahbaz

    (National College of Business Administration and Economics, Lahore, Pakistan.)

  • Khalil Ahmad

    (National College of Business Administration and Economics, Lahore, Pakistan.)

  • A. R. Chaudhary

    (National College of Business Administration and Economics, Lahore, Pakistan.)

Abstract

This paper aims to investigate the impact of macroeconomic variables on economic growth after Structural Adjustment Programme (SAP) in Pakistan. In doing so, study utilises the quarterly time series data from 1991Q1 to 2007Q4. Advanced Autoregressive Distributed Lag Model (ARDL) approach has been employed for cointegration and error correction model (ECM) for short-run results in the case of Pakistan. Empirical investigations indicate that credit to private sector (financial development), foreign direct investment and inflow of remittances correlate positively with economic growth in the long run. High inflation rate and trade-openness slow down the speed of growth rate in short as well as long run.

Suggested Citation

  • Muhammad Shahbaz & Khalil Ahmad & A. R. Chaudhary, 2008. "Economic Growth and Its Determinants in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 47(4), pages 471-486.
    • Handle: RePEc:pid:journl:v:47:y:2008:i:4:p:471-486
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    More about this item

    Keywords

    Growth; ARDL Cointegration;

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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