Trade Openness and Growth: An Analysis of Transmission Mechanism in Pakistan
AbstractThis paper investigates the linkages between trade policy openness and economic growth for Pakistan for the period 1973 to 2008. The paper tests the hypothesis that trade policy does not affect economic growth directly rather it affects through some growth determining economic variables, which then effect economic growth. For this purpose a simultaneous system of equations is estimated through the Three Stage Least Squares. The results suggest a positive impact of trade policy openness on Black Market Premium, Domestic Investment and Foreign Direct Investment (FDI) and negative impact on Macro Policy Index. However, Black Market Premium and FDI show negative and Domestic Investment shows positive impact on economic growth.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 24534.
Date of creation: 18 Aug 2010
Date of revision: 20 Aug 2010
Openness; Growth; Transmission Mechanism; Pakistan;
Find related papers by JEL classification:
- F10 - International Economics - - Trade - - - General
- C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-08-28 (All new papers)
- NEP-DEV-2010-08-28 (Development)
- NEP-FDG-2010-08-28 (Financial Development & Growth)
- NEP-INT-2010-08-28 (International Trade)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Siddiqui, Amir Hussain & Iqbal, Javed, 2005. "Impact of trade openness on output growth for Pakistan: an empirical investigation," MPRA Paper 23757, University Library of Munich, Germany.
- Wacziarg, Romain, 1998.
"Measuring the dynamic gains from trade,"
Policy Research Working Paper Series
2001, The World Bank.
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