IDEAS home Printed from https://ideas.repec.org/a/rfh/bbejor/v9y2020i3p135-140.html
   My bibliography  Save this article

The Effect Of Trade Openness On Inflation In Pakistan

Author

Listed:
  • FIAZ AHMAD SULEHRI

    (Lahore School of Accountancy and Finance, University of Lahore.)

  • JAVARIA KHAN

    (Lahore School of Accountancy and Finance, University of Lahore)

Abstract

This study empirically verifies the existence of significant relationship between inflation and trade openness for Pakistan using annual time-series data for the period of 1980 to 2014. The basic objective of this study is to examine the Romer’s hypothesis for Pakistan with real agriculture value added, real exchange rate, real gross domestic product, money & quasi money and used trade openness, import openness and export openness ratios separately as explanatory variables with inflation rate as dependent variables. For this purpose, we have used ARDL technique the expected empirical findings show that there is no long-run relationship between inflation and trade openness, which rejects the existence of Romer’s hypothesis for Pakistan.

Suggested Citation

  • Fiaz Ahmad Sulehri & Javaria Khan, 2020. "The Effect Of Trade Openness On Inflation In Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 9(3), pages 135-140, September.
    • Handle: RePEc:rfh:bbejor:v:9:y:2020:i:3:p:135-140
    as

    Download full text from publisher

    File URL: https://bbejournal.com/index.php/BBE/article/view/123/77
    Download Restriction: no
    File URL: https://bbejournal.com/index.php/BBE/article/view/123
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Sumera Arshad & Amajd Ali, 2016. "Trade-off between Inflation, Interest and Unemployment Rate of Pakistan: Revisited," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 5(4), pages 193-209, December.
    2. Amjad Ali & Farooq Ahmed & Fazal- Ur- Rahman, 2016. "Impact of Government Borrowing on Financial Development (A case study of Pakistan)," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 5(3), pages 135-143, September.
    3. Ari Aisen & Francisco Veiga, 2008. "Political instability and inflation volatility," Public Choice, Springer, vol. 135(3), pages 207-223, June.
    4. Ali, Amjad & Ahmad, Khalil, 2014. "The Impact of Socio-Economic Factors on Life Expectancy for Sultanate of Oman: An Empirical Analysis," MPRA Paper 82500, University Library of Munich, Germany, revised 2014.
    5. Amjad Ali & Marc Audi, 2018. "Macroeconomic Environment and Taxes Revenues in Pakistan: An Application of ARDL Approach," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 7(1), pages 30-39, March.
    6. Amjad Ali & Ismail Senturk, 2019. "Justifying the Impact of Economic Deprivation, Maternal Status and Health infrastructure on Under-Five Child Mortality in Pakistan: An Empirical Analysis," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 8(3), pages 140-154, September.
    7. Erasmus K. Kersting & Mark A. Wynne, 2007. "Openness and inflation," Staff Papers, Federal Reserve Bank of Dallas, issue Apr.
    8. Ali, Amjad & Ur Rehman, Hafeez, 2015. "Macroeconomic Instability and Its Impact on Gross Domestic Product: An Empirical Analysis of Pakistan," MPRA Paper 82496, University Library of Munich, Germany, revised 2015.
    9. Jafari Samimi, Ahmad & Ghaderi, Saman & Sanginabadi, Bahram, 2011. "Openness and Inflation in Iran," MPRA Paper 52408, University Library of Munich, Germany.
    10. Amjad Ali & Marc Audi, 2016. "The Impact of Income Inequality, Environmental Degradation and Globalization on Life Expectancy in Pakistan: An Empirical Analysis," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 4(4), pages 182-193, April.
    11. Asif Sajid & Amjad Ali, 2018. "Inclusive Growth and Macroeconomic Situations in South Asia: An Empirical Analysis," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 7(3), pages 97-109, September.
    12. Iram Ashraf & Amjad Ali, 2018. "Socio-Economic Well-Being and Women Status in Pakistan: An Empirical Analysis," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 7(2), pages 46-58, June.
    13. Sachsida, Adolfo & Carneiro, Francisco Galrao & Loureiro, Paulo R. A., 2003. "Does greater trade openness reduce inflation? Further evidence using panel data techniques," Economics Letters, Elsevier, vol. 81(3), pages 315-319, December.
    14. John B. Taylor, 1995. "The Monetary Transmission Mechanism: An Empirical Framework," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 11-26, Fall.
    15. Ali, Amjad & Zulfiqar, Kalsoom, 2018. "An Assessment of Association between Natural Resources Agglomeration and Unemployment in Pakistan," MPRA Paper 87968, University Library of Munich, Germany.
    16. Amjad Ali & Nooreen Mujahid & Yahya Rashid & Muhammad Shahbaz, 2015. "Human Capital Outflow and Economic Misery: Fresh Evidence for Pakistan," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 124(3), pages 747-764, December.
    17. Amjad Ali & Chan Bibi, 2020. "Public Policies, Socio-Economic Environment And Crimes In Pakistan: A Time Series Analysis," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 9(1), pages 1-11, March.
    18. Mohamad Kassem & Amjad Ali & Marc Audi, 2019. "Unemployment Rate, Population Density and Crime Rate in Punjab (Pakistan): An Empirical Analysis," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 8(2), pages 92-104, June.
    19. Tahir Mukhtar, 2010. "Does Trade Openness Reduce Inflation? Empirical Evidence from Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 15(2), pages 35-50, Jul-Dec.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ismail Senturk & Fiaz Ahmad Sulehri & Syeda Mehak Ali, 2022. "Financial Development and Innovation Led-Growth: A Case of Selected Developing Countries," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 8(3), pages 81-97, September.
    2. Fiaz Ahmad Sulehri & Mohammad Ahmed & Amjad Ali, 2022. "Proprietorship Structure and Firm Performance in the Context of Tunneling: An Empirical Analysis of Non-Financial Firms in Pakistan," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 8(4), pages 115-124, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Aftab Ahmad, 2020. "Poverty Terrorism Nexus: A Case Study Of Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 9(4), pages 162-172, December.
    2. Arif Khan & Gul Zeb Chaudhary, 2020. "Determinants Of Inflation In Case Of Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 9(4), pages 151-161, December.
    3. SHAHID MANZOOR SHAH & Nooria Shams-U-Din, 2020. "Determinants Of Death Rates In Pakistan: An Empirical Analysis," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 9(3), pages 141-150, September.
    4. Ismail Senturk & Amna Shafiq Minhas, 2020. "Researching Shadow Education: Methodological Challenges And Directions," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 9(4), pages 173-182, December.
    5. Maria Safdar & Muhammad Zahid Naeem, 2020. "Outflow Of Human Capital And Health Sector In Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 9(3), pages 113-122, September.
    6. Muhammad Zahid Naeem, 2020. "Political Instability, Trade Openness And Economic Growth In Pakistan: An Empirical Analysis," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 9(4), pages 183-190, December.
    7. Maria Safdar, 2020. "The Impact Of Terrorism On Economic Growth In Pakistan: An Empirical Analysis," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 9(4), pages 191-201, December.
    8. Muhammad Asim & Hafiza Naila Saddique, 2020. "Migration And Unemployment In Pakistan: A Time Series Analysis," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 9(3), pages 123-134, September.
    9. Yannick Roussel & Amjad Ali & Marc Audi, 2021. "Measuring The Money Demand In Pakistan: A Time Series Analysis," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 10(1), pages 27-41, March.
    10. Khalil Ahmad & Ismail Senturk, 2021. "Health Structure, Nutrition And Economic Growth In Pakistan: A Time Series Analysis," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 10(1), pages 42-50, March.
    11. Shakil Ahmad & Muhammad Waqas Khan, 2021. "Investigating The Effect Of Foreign Direct Investment (Fdi) And Foreign Remittances On Economic Growth In Pakistan (1990-2018): A Time Series Analysis Using Ardl Model Approach," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 10(1), pages 1-7, March.
    12. Alim, Wajid & Ali, Amjad & Farid, Maryiam, 2021. "The Impact of Islamic Portfolio on Risk and Return," MPRA Paper 111211, University Library of Munich, Germany.
    13. Shazia Sana & Shahnawaz Malik & Muhammad Ramzan Sheikh, 2022. "Investigating The Effectiveness Of Channels Of Monetary Transmission Mechanism In Pakistan: An Application Of Var Model, Impulse Response Function And Variance Decomposition," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 11(2), pages 160-184, June.
    14. Marc Audi & Fiaz Ahmad Sulehri & Amjad Ali & Razan Al-Masri, 2022. "An Event Based Analysis of Stock Return and Political Uncertainty in Pakistan: Revisited," International Journal of Economics and Financial Issues, Econjournals, vol. 12(5), pages 39-56, September.
    15. Ahmad Latif & Rimsha Javed, 2021. "Does Economic Growth, Population Growth And Energy Use Impact Carbondioxide Emissions In Pakistan? An Ardl Approach," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 10(2), pages 85-91, June.
    16. Syed Fazal Rehman, 2020. "Exploring The Long Run Effects And Relationship Of Military Expenditures And Economic Growth In The Scenario Of Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 9(3), pages 106-112, September.
    17. Shahid Manzoor Shah, 2020. "Corporate Governance And Firm Level Characteristics Of Sustainability: Evidence From Non-Financial Firms Operating In The Usa," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 9(2), pages 92-100, June.
    18. Sulehri, Fiaz Ahmad & Ahmed, Usman & Alim, Wajid, 2021. "Black Economy, Financial Inclusion, Financial Liberalization Nexus: A Panel Analysis of Developing Countries," MPRA Paper 111129, University Library of Munich, Germany.
    19. Syed Fazal Rehman & Hadya Fatima Cheema, 2021. "Exploring The Relationship Between Energy Usage And Economic Growth: In The Perspective Of Brics Nations," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 10(1), pages 17-26, March.
    20. Hassan Ajmal, 2020. "Exploring The Linkages Between Investment And Economic Growth: Empirical Evidence From Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 9(2), pages 85-91, June.

    More about this item

    Keywords

    trade openness; inflation; real exchange rate; real gross domestic product;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • P24 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - National Income, Product, and Expenditure; Money; Inflation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rfh:bbejor:v:9:y:2020:i:3:p:135-140. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Muhammad Irfan Chani (email available below). General contact details of provider: https://edirc.repec.org/data/rffhlpk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.