Fiscal Discretion and Its Impact on Pakistan Economy
This paper studies the discretionary fiscal policy, its size and particularly the impact of discretionary government spending on output, employment level and inflation over the period of 39 years from 1971-72 to 2009-10. The discretionary fiscal policy is identified through the residual term (based on a fiscal reaction function), political system and market structure. Antonio Fatás and Ilian Mihov (2003) model is amended by including employment level and inflation for quantitative estimates of discretionary policy then this discretion is regressed against output, employment level and inflation variation. The paper finds the presence of fiscal discretion but this discretion does not influence the output, employment and inflation significantly. It attempts to highlight the succinct merits and demerits of the debated discretionary fiscal policy for Pakistan economy. Lastly it suggests a political and economically suitable policy framework to be made available to public policy-makers for discretionary policy conduct so that desired influence on economic variables could be achieved.
Volume (Year): 51 (2012)
Issue (Month): 4 ()
|Contact details of provider:|| Postal: P.O.Box 1091, Islamabad-44000|
Web page: http://www.pide.org.pk
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:pid:journl:v:51:y:2012:i:4:p:339-364. 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: (Khurram Iqbal)
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.