IDEAS home Printed from
   My bibliography  Save this article

Investigating the Real Shocks in the Discount Rate of Pakistan


  • Muhammad Yasir

    () (Iqra University)


The monetary-policy always has a vital role in determination of the economic conditions of any country, It is witnessed that the discount rate announced in year 1948 was of 3%, while the discount rate announced in year 2013 has come to be at 10%. The research aims to investigate Real Shocks in the Discount Rate of Pakistan, where by 66 years of historical data of the discount rate in Pakistan is tested using the Augmented Ducky Fuller test in-order to determine the stationarity. The outcomes of the results of this study demonstrate that the discount rate of Pakistan is non-stationary in nature which confirms that there is a real shock in the discount rate of Pakistan for 1948-2013.

Suggested Citation

  • Muhammad Yasir, 2015. "Investigating the Real Shocks in the Discount Rate of Pakistan," South Asian Journal of Management Sciences (SAJMS), Iqra University, Iqra University, vol. 9(1), pages 10-14, Spring.
  • Handle: RePEc:ajm:journl:v:9:y:2015:i:1:p:10-14

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Joseph H. Haslag & Michael Nieswiadomy & Slottje, D.J., 1990. "Are net discount ratios stationary?: the implications for present value calculations," Working Papers 9006, Federal Reserve Bank of Dallas.
    2. Thornton, Daniel L, 1994. "Why Do T-Bill Rates React to Discount Rate Changes?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 26(4), pages 839-850, November.
    3. Laumas, G S, 1981. "Discount Rate and Wealth," Journal of Political Economy, University of Chicago Press, vol. 89(1), pages 196-198, February.
    4. Campbell, John Y & Mankiw, N Gregory, 1990. "Permanent Income, Current Income, and Consumption," Journal of Business & Economic Statistics, American Statistical Association, vol. 8(3), pages 265-279, July.
    5. Keith Hancock & Sue Richardson, 1985. "Discount Rates and the Distribution of Lifetime Earnings," Journal of Human Resources, University of Wisconsin Press, vol. 20(3), pages 346-360.
    6. Kenneth F. Reinschmidt, 2002. "Aggregate Social Discount Rate Derived from Individual Discount Rates," Management Science, INFORMS, vol. 48(2), pages 307-312, February.
    7. Marc Schauten & Rudolf Stegink & Gijs de Graaff, 2010. "The discount rate for discounted cash flow valuations of intangible assets," Managerial Finance, Emerald Group Publishing, vol. 36(9), pages 799-811, August.
    8. Choi, Woon Gyu, 1999. "Estimating the Discount Rate Policy Reaction Function of the Monetary Authority," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 14(4), pages 379-401, July-Aug..
    9. Kathleen Hope Brown, 1981. "Effects of Changes in the Discount Rate on the Foreign Exchange Value of the Dollar: 1973 to 1978," The Quarterly Journal of Economics, Oxford University Press, vol. 96(3), pages 551-558.
    10. Anderson, C Leigh & Dietz, Maya & Gordon, Andrew & Klawitter, Marieka, 2004. "Discount Rates in Vietnam," Economic Development and Cultural Change, University of Chicago Press, vol. 52(4), pages 873-887, July.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Abbas, Tahir & Ali, Ghaffar & Adil, Sultan Ali & Bashir, Muhammad Khalid & Kamran, Muhammad Asif, 2017. "Economic analysis of biogas adoption technology by rural farmers: The case of Faisalabad district in Pakistan," Renewable Energy, Elsevier, vol. 107(C), pages 431-439.

    More about this item


    Real shocks; discount rate.;


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ajm:journl:v:9:y:2015:i:1:p:10-14. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (IU) The email address of this maintainer does not seem to be valid anymore. Please ask IU to update the entry or send us the correct email address. General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.