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Exploring the Impact of Macro & Socio Economic Variables on GDP of Pakistan and Psychological Impacts of Inflation on Poor Families

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Listed:
  • Farida Khanam
  • Syed Shahzaib Pirzada
  • Shagufta Nasreen

Abstract

This paper explores the impact of macroeconomic variables like interest rate, real exchange rate and role of inflation in GDP of Pakistan. This paper aspires to shed light on the factors all the way during this difficulty occurs for our financial markets and economy. And it observes the socio-economic issue force of inflation on poor families. To call attention to the socio-economic and psychological collision of inflation on poor families. Researchers explained this study by analyzing the financial system & its performance exaggerated by macroeconomic factor such as inflation. The study brings to light that interest rate, exchange rate, and inflation have great impact on GDP. Exchange rate has positive relationship with GDP while inflation and interest rate are negatively related with GDP. Researchers talk about the causes of inflation cost pull and demand pull inflation and how researchers fight the inflation from our economy. Researchers discuss implications of our conclusion for theory and practice. On the bases of results and its examination it is not compulsory that Government accepts extended monetary policy in order to reduce inflation, as the results point out that inflation has a negative effect on GDP. In case of developing countries like Pakistan, high value of real exchange rate should be upheld because results demonstrate that there is significant and positive impact of exchange rate on GDP. Upper limit for rate of interest should be disconnected in order to make the economy better.

Suggested Citation

  • Farida Khanam & Syed Shahzaib Pirzada & Shagufta Nasreen, 2014. "Exploring the Impact of Macro & Socio Economic Variables on GDP of Pakistan and Psychological Impacts of Inflation on Poor Families," Journal of Social Economics, Research Academy of Social Sciences, vol. 1(1), pages 37-43.
    • Handle: RePEc:rss:jnljse:v1i1p5
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    References listed on IDEAS

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    3. Zezza, Alberto & Davis, Benjamin & Azzarri, Carlo & Covarrubias, Katia & Tasciotti, Luca & Anríquez, Gustavo, 2008. "The impact of rising food prices on the poor," ESA Working Papers 289027, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).
    4. Bruno, Michael & Easterly, William, 1998. "Inflation crises and long-run growth," Journal of Monetary Economics, Elsevier, vol. 41(1), pages 3-26, February.
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