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The Impact of Public Investment on Economic Growth in Pakistan

Author

Listed:
  • Ejaz Ghani

    (Pakistan Institute of Development Economics, Islamabad.)

  • Musleh-Ud Din

    (Pakistan Institute of Development Economics, Islamabad.)

Abstract

This paper explores the role of public investment in the process of economic growth, in the context of Pakistan’s economy, using the vector autoregressive approach (VAR). Based on theoretical considerations, the model also includes private investment and public consumption besides public investment. The results show that growth is largely driven by private investment and that no strong inference can be drawn from the effects of public investment and public consumption on economic growth.

Suggested Citation

  • Ejaz Ghani & Musleh-Ud Din, 2006. "The Impact of Public Investment on Economic Growth in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 45(1), pages 87-98.
  • Handle: RePEc:pid:journl:v:45:y:2006:i:1:p:87-98
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    File URL: http://www.pide.org.pk/pdf/PDR/2006/Volume1/87-98.pdf
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    References listed on IDEAS

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    Cited by:

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    2. Sajawal Khan & Muhammad Arshad Khan, 2007. "What Determines Private Investment? The Case of Pakistan," Finance Working Papers 22202, East Asian Bureau of Economic Research.
    3. Matthew McCartney, 2014. "The Political Economy of Industrial Policy: A Comparative Study of the Textiles Industry in Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 19(Special E), pages 105-134, September.
    4. Hasan Shahzad & Attiya Yasmin Javid, 2015. "Impact of Debt on Aggregate Investment and Productivity in Developing Asian Countries," PIDE-Working Papers 2015:127, Pakistan Institute of Development Economics.
    5. Nadeem Ul Haque & Musleh-ud Din & Lubna Hasan, 2007. "Research at PIDE: Key Messages," PIDE Books, Pakistan Institute of Development Economics, number 2007:2.
    6. Nadeem Ul Haque, 2020. "Doing Taxes Better: Analysing the PSDP," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 59(1), pages 139-142.
    7. Matthew McCartney, 2011. "Pakistan, Growth, Dependency, and Crisis," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 16(Special E), pages 71-94, September.
    8. Muhammad Javid, 2019. "Public and Private Infrastructure Investment and Economic Growth in Pakistan: An Aggregate and Disaggregate Analysis," Sustainability, MDPI, vol. 11(12), pages 1-22, June.
    9. Nadeem Ul Haque, 2020. "Macroeconomic Research and Policy Making: Processes and Agenda," PIDE-Working Papers 2020:172, Pakistan Institute of Development Economics.
    10. Matthew McCartney, 2018. "The China-Pakistan Economic Corridor (CPEC): Considering Contemporary Pakistan through Old-Fashioned Economics and Historical Case Studies," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 23(2), pages 19-48, July-Dec.
    11. Baher Mohamed Atlam & Ahmed Ashour Soltan & Noha Mohey Mohamed, 2017. "The Impact of National Private Investment on Manufacturing in Egypt," International Journal of Economics and Financial Issues, Econjournals, vol. 7(1), pages 192-200.
    12. Rabnawaz, Ambar & Jafar, Rana Muhammad Sohail, 2015. "Impact of Public Investment on Economic Growth," MPRA Paper 70377, University Library of Munich, Germany.
    13. Nilofer, Nilofer & Qayyum, Abdul, 2018. "Impact of Foreign Direct Investment on Growth in Pakistan: The ARDL Approach," MPRA Paper 86961, University Library of Munich, Germany, revised 2018.
    14. Vaqar Ahmed & Ahsan Abbas & Saira Ahmed, 2013. "Public infrastructure and economic growth in Pakistan: a dynamic CGE-microsimulation analysis," Working Papers MPIA 2013-01, PEP-MPIA.
    15. Nguyen Thi Canh & Nguyen Anh Phong, 2018. "Effect of Public Investment on Private Investment and Economic Growth: Evidence From Vietnam by Economic Industries," Applied Economics and Finance, Redfame publishing, vol. 5(2), pages 95-110, March.
    16. Oukhallou, Youssef, 2016. "Analyzing economic growth: what role for public investment?," MPRA Paper 69772, University Library of Munich, Germany.
    17. Farhadi, Minoo, 2015. "Transport infrastructure and long-run economic growth in OECD countries," Transportation Research Part A: Policy and Practice, Elsevier, vol. 74(C), pages 73-90.
    18. Sharif, Arshian & Shahbaz, Muhammad & Hille, Erik, 2019. "The Transportation-growth nexus in USA: Fresh insights from pre-post global crisis period," Transportation Research Part A: Policy and Practice, Elsevier, vol. 121(C), pages 108-121.
    19. Isaac Leobardo Sanchez Juarez & Rosa Maria Garcia Almada, 2014. "Production, Employment And Public Investment In Northern Border Of Mexico, Produccion, Empleo E Inversion Publica En La Frontera Norte De Mexico," Revista Internacional Administracion & Finanzas, The Institute for Business and Finance Research, vol. 7(7), pages 111-126.
    20. Andrew K. Kamenju & Dr. T. Olweny, 2021. "The Nexus Between Internal Investment and Economic Growth in Kenya," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 11(2), pages 1-2.
    21. Mohammad Afzal, 2007. "The Impact of Globalisation on Economic Growth of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 46(4), pages 723-734.
    22. Shaheen Naseer, 2019. "Public Spending, Quality of Bureaucracy and Economic Growth: A Theoretical Analysis," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 58(2), pages 203-221.

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    More about this item

    Keywords

    Public Investment; Economic Growth;

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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