Openness and Inflation: A Case Study of Pakistan
AbstractRomer (1993) postulates a hypothesis that inflation is lower in small and open economies. In this paper we test this hypothesis for Pakistan economy using annual time series data for the period 1973-2005. We find that besides the conventional explanatory variables like real GDP growth, monetary growth, interest rate, and wheat support price, the openness variable such as growth in ‘overall trade to GDP ratio’ also has significant negative impact on the domestic price growth in Pakistan.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 10214.
Date of creation: 2006
Date of revision:
Find related papers by JEL classification:
- F15 - International Economics - - Trade - - - Economic Integration
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- David Romer, 1991.
"Openness and inflation: theory and evidence,"
Federal Reserve Bank of San Francisco, issue Nov.
- Cristina T. Terra, 1998.
"Openness And Inflation: A New Assessment,"
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- David Romer, 1998. "A New Assessment Of Openness And Inflation: Reply," The Quarterly Journal of Economics, MIT Press, vol. 113(2), pages 649-652, May.
- Hanif, Muhammad Nadim, 2012. "A Note on Food Inflation in Pakistan," MPRA Paper 45009, University Library of Munich, Germany, revised 11 Mar 2013.
- Jafari Samimi, Ahmad & Ghaderi, Saman & Hosseinzadeh, Ramezan & Nademi, Younes, 2012. "Openness and inflation: New empirical panel data evidence," Economics Letters, Elsevier, vol. 117(3), pages 573-577.
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