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Impact of Devaluation on GDP of Pakistan

Author

Listed:
  • Nooreen Mujahid

    (Department of Economics, University of Karachi)

  • Aniqa Zeb

    (Department of Economics, University of Karachi)

Abstract

Exchange rate plays an important role in any economy as it also exchanges all the transactions in the international market. This paper studies the relationship of exchange rate to the Gross Domestic Product of Pakistan. Time series data from 1980 to 2012 has been employed in the study. Data set has been taken from the website of UNCTAD. GDP and exchange rate are the variables in the study. Objective of the paper is to find long run integration and to check the causality between these variables. The Granger Causality test has been applied on the data to find the objective of the study. Long run relationship has been found in these variables however, causality has not been found at any lag in exchange rate and Gross Domestic product. Devaluation has been found contractionary.

Suggested Citation

  • Nooreen Mujahid & Aniqa Zeb, 2014. "Impact of Devaluation on GDP of Pakistan," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 2(8), pages 345-349, August.
    • Handle: RePEc:ijr:journl:v:2:y:2014:i:8:p:345-349
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    References listed on IDEAS

    as
    1. Muhammad Shahbaz & Faridul Islam & Naveed Aamir, 2012. "Is devaluation contractionary? Empirical evidence for Pakistan," Economic Change and Restructuring, Springer, vol. 45(4), pages 299-316, November.
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    More about this item

    Keywords

    Exchange rate; Gross Domestic product; Cointegration;
    All these keywords.

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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