Trade,Financial and Growth Nexus in Pakistan
AbstractThis paper empirically investigates the impact of trade and financial liberalization on economic growth in Pakistan using annual observations over the period 1961-2005. The analysis is based on the bound testing approach of cointegration advanced by Pesaran et al (2001). The empirical findings suggest that both trade and financial liberalization policies play an important role in nhancing economic growth in Pakistan in the long-run. However, the short-run responses of real deposit rate and trade policy variables are very low, suggesting further acceleration of reform process. The feedback coefficient suggests a very slow rate of adjustment towards long-run equilibrium. The estimated equation remains stable over the period of study as indicated by CUSUM and CUSUMQ stability tests.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 6523.
Date of creation: Dec 2007
Date of revision:
Publication status: Published in Economic Analysis Working Papers 14.6(2007): pp. 1-24
Trade Liberalization; Financial Development; Economic Growth; Bound Test;
Other versions of this item:
- Muhammad Arshad Khan & Muhammad Abdul Qayyum, 2007. "Trade, Financial and Growth Nexus in Pakistan," Economic Analysis Working Papers (2002-2010). Atlantic Review of Economics (2011-2013), Colexio de Economistas de A Coruña, Spain and Fundación Una Galicia Moderna, vol. 6, pages 1-24, December.
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-01-05 (All new papers)
- NEP-CWA-2008-01-05 (Central & Western Asia)
- NEP-DEV-2008-01-05 (Development)
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