The relationship between growth and poverty in forecasting framework: Pakistan's future in the year 2035
Forecasting poverty in the future is mostly a matter of forecasting economic growth. The objective of the study is to examine the inter-temporal link between growth and poverty in Pakistan, over the next 25years period i.e., from the years 2011 to 2035. The generalized version of variance decomposition and impulse response analysis is operated in this study to test the temporal causality among poverty measures (i.e., head count ratio, poverty gap and squared poverty gap), growth measures (i.e., average household income, industry value added and agriculture value added) and income inequality to see if the growth of income and poverty measures contains considerable information to predict each other, on the sectoral level of Pakistan i.e., rural, urban and national level. The results of variance decomposition analysis show that shock to household counts initially accounts for a considerable portion of the forecast error variance of average household income in all rural, urban and at national level respectively. Household counts have the highest impact on average income in Pakistan (approximately 93.2%), followed by urban region (approximately 90.5% in average) and the lowest in rural areas (approximately 82.3%) both in short- and long-run. Impulse response analysis demonstrates that growth, poverty measures and income inequality are so strongly knitted to one another that any positive shock to any one of them would be beneficial on the one hand and may be harmful on the other hand. The vicious cycle of poverty can only be scratched by giving consistent positive shocks to growth and negative shocks to income inequality.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
When requesting a correction, please mention this item's handle: RePEc:eee:ecmode:v:30:y:2013:i:c:p:468-491. 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: (Zhang, Lei)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 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.