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The impact of financial openness, trade openness on macroeconomic volatility in Pakistan: ARDL Co Integration approach

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  • Mujahid, Hira
  • Alam, Shaista

Abstract

The purpose of this paper is to investigate the relationship between trade openness, financial openness, and macroeconomic volatility in Pakistan. For this purpose, time-series data from 1970-to 2010 and the ARDL cointegration technique were used to find the long-run relationship. The results proposed that in the long run, trade openness generates volatility in output and investment, whereas financial openness has a significant effect only on investment volatilities. Furthermore, the error correction model suggested that in the short run, trade and financial openness significantly affect output, consumption, and investment volatilities.

Suggested Citation

  • Mujahid, Hira & Alam, Shaista, 2014. "The impact of financial openness, trade openness on macroeconomic volatility in Pakistan: ARDL Co Integration approach," MPRA Paper 113234, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:113234
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    References listed on IDEAS

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    Cited by:

    1. Ozoemena Stanley Nwodo & Fredrick Onyebuchi Asogwa, 2017. "Global Integration, Non-Oil Export and Economic Growth in Nigeria," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 3(1), pages 59-67, March.
    2. Abiodun Moses Adetokunbo & Ochuwa Priscillia Edioye, 2020. "Response of economic growth to the dynamics of service sector in Nigeria," Future Business Journal, Springer, vol. 6(1), pages 1-10, December.

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    More about this item

    Keywords

    Macroeconomic Volatility; Trade openness; financial openness; Consumption; Investment;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts

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