IDEAS home Printed from https://ideas.repec.org/a/pje/journl/article29sumii.html
   My bibliography  Save this article

Structural Changes And Economic Growth In Pakistan

Author

Listed:
  • Muhammad Akram GILAL*
  • Muhammad AJMAIR**
  • Sohail FAROOQ***

Abstract

Over the time period, the structure of the economy does not remain same. This study examines the interaction between economic growth and its determinants for Pakistan. Since fixed parameter approaches do not take into account effect of structural changes on parameter constancy, the study employs Kalman Filter based time-varying parameter approach for the empirical analysis. Result shows significant effect of inflation, gross fixed capital formation, gross national expenditures and remittances received on economic growth of the country. However, the effect of significant macroeconomic determinants on growth process of the country is not constant but time-varying.

Suggested Citation

  • Muhammad Akram GILAL* & Muhammad AJMAIR** & Sohail FAROOQ***, 2019. "Structural Changes And Economic Growth In Pakistan," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 29(1), pages 35-51.
    • Handle: RePEc:pje:journl:article29sumii
    as

    Download full text from publisher

    File URL: http://www.aerc.edu.pk/wp-content/uploads/2019/06/Paper-877-GILAL-II-1.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. M. B. Priestley, 1980. "State‐Dependent Models: A General Approach To Non‐Linear Time Series Analysis," Journal of Time Series Analysis, Wiley Blackwell, vol. 1(1), pages 47-71, January.
    2. G. W. Morrison & D. H. Pike, 1977. "Kalman Filtering Applied to Statistical Forecasting," Management Science, INFORMS, vol. 23(7), pages 768-774, March.
    3. Sanika Sulochani Ramanayake & Keun Lee, 2015. "Does openness lead to sustained economic growth? Export growth versus other variables as determinants of economic growth," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 20(3), pages 345-368, July.
    4. Lundbergh, Stefan & Terasvirta, Timo & van Dijk, Dick, 2003. "Time-Varying Smooth Transition Autoregressive Models," Journal of Business & Economic Statistics, American Statistical Association, vol. 21(1), pages 104-121, January.
    5. Peter Pedroni & David Canning, 2004. "The Effect of Infrastructure on Long Run Economic Growth," Department of Economics Working Papers 2004-04, Department of Economics, Williams College.
    6. Dollar, David & Kleineberg, Tatjana & Kraay, Aart, 2016. "Growth still is good for the poor," European Economic Review, Elsevier, vol. 81(C), pages 68-85.
    7. Phillips, Peter C. B., 2001. "Trending time series and macroeconomic activity: Some present and future challenges," Journal of Econometrics, Elsevier, vol. 100(1), pages 21-27, January.
    8. Stock, James H & Watson, Mark W, 1996. "Evidence on Structural Instability in Macroeconomic Time Series Relations," Journal of Business & Economic Statistics, American Statistical Association, vol. 14(1), pages 11-30, January.
    9. M Mafizur Rahman & M Salahuddin, 2010. "The determinants of economic growth in Pakistan: Does stock market development play a major role?," Economic Issues Journal Articles, Economic Issues, vol. 15(2), pages 69-86, September.
    10. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    11. Arslanturk, Yalcin & Balcilar, Mehmet & Ozdemir, Zeynel Abidin, 2011. "Time-varying linkages between tourism receipts and economic growth in a small open economy," Economic Modelling, Elsevier, vol. 28(1-2), pages 664-671, January.
    12. Livio Stracca, 2003. "The Functional Form Of The Demand For Euro Area M1," Manchester School, University of Manchester, vol. 71(2), pages 172-204, March.
    13. Asteriou, D. & Agiomirgianakis, G. M., 2001. "Human capital and economic growth: Time series evidence from Greece," Journal of Policy Modeling, Elsevier, vol. 23(5), pages 481-489, July.
    14. Vusal Musayev, 2016. "Externalities in Military Spending and Growth: The Role of Natural Resources as a Channel through Conflict," Defence and Peace Economics, Taylor & Francis Journals, vol. 27(3), pages 378-391, June.
    15. A Alodadi & J Benhin, 2015. "Long Term Economic Growth in Oil-Rich Saudi Arabia: What is the role for non-oil sectors?," Economic Issues Journal Articles, Economic Issues, vol. 20(1), pages 109-130, March.
    16. Ali, Amjad & Ur Rehman, Hafeez, 2015. "Macroeconomic Instability and Its Impact on Gross Domestic Product: An Empirical Analysis of Pakistan," MPRA Paper 82496, University Library of Munich, Germany, revised 2015.
    17. Levine, Ross & Renelt, David, 1992. "A Sensitivity Analysis of Cross-Country Growth Regressions," American Economic Review, American Economic Association, vol. 82(4), pages 942-963, September.
    18. repec:agr:journl:v:9(598):y:2014:i:9(598):p:103-114 is not listed on IDEAS
    19. David E. Bloom & David Canning, 2008. "Population Health and Economic Growth," World Bank Publications - Books, The World Bank Group, number 28036, December.
    20. Berta Rivera & Luis Currais, 1999. "Economic growth and health: direct impact or reverse causation?," Applied Economics Letters, Taylor & Francis Journals, vol. 6(11), pages 761-764.
    21. Mehmet Balcilar & Rene頶an Eyden & Roula Inglesi-Lotz & Rangan Gupta, 2014. "Time-varying linkages between tourism receipts and economic growth in South Africa," Applied Economics, Taylor & Francis Journals, vol. 46(36), pages 4381-4398, December.
    22. Slade, Margaret E., 1989. "Modelling stochastic and cyclical components of technical change : An application of the Kalman filter," Journal of Econometrics, Elsevier, vol. 41(3), pages 363-383, July.
    23. Terasvirta, T & Anderson, H M, 1992. "Characterizing Nonlinearities in Business Cycles Using Smooth Transition Autoregressive Models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 7(S), pages 119-136, Suppl. De.
    24. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
    25. Muhammad Shahbaz & Khalil Ahmad & A. R. Chaudhary, 2008. "Economic Growth and Its Determinants in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 47(4), pages 471-486.
    26. Shaheen, Safana & Awan, Masood Sarwar & Waqas, Muhammad & Aslam, Muhammad Amir, 2011. "Financial Development, International Trade and Economic Growth: Empirical Evidence from Pakistan," MPRA Paper 32876, University Library of Munich, Germany.
    27. Zafar Iqbal & Ghulam Mustafa Zahid, 1998. "Macroeconomic Determinants of Economic Growth in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 37(2), pages 125-148.
    28. Khalil Ahmad & Sajida Wajid, 2013. "What Matters for Economic Growth in Pakistan: Fiscal Policy or its Composition?," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 3(2), pages 196-215.
    29. Sami ULLAH & Saleem KHAN & Farid ULLAH, 2014. "Assessment of key determinants for economic growth in Pakistan," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(9(598)), pages 103-114, September.
    30. Mohsin S. Khan, 2005. "Human Capital and Economic Growth in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 44(4), pages 455-478.
    31. C. Detotto & E. Otranto, 2010. "A Time Varying Parameter Approach to Analyze the Macroeconomic Consequences of Crime," Working Paper CRENoS 201002, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    32. Khalil Ahmad & Sajida Wajid, 2013. "What Matters for Economic Growth in Pakistan: Fiscal Policy or its Composition?," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 3(2), pages 196-215, February.
    33. Mehmet Zeki Ak & Mustafa Kirca & Mehmet Nurullah Altintaº, 2016. "The impacts of financial development on growth:A time-varying causality analysis for Turkey," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 34(2), pages 529-554.
    34. Arisoy, Ibrahim & Ozturk, Ilhan, 2014. "Estimating industrial and residential electricity demand in Turkey: A time varying parameter approach," Energy, Elsevier, vol. 66(C), pages 959-964.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jeyhun I. Mikayilov & Fakhri J. Hasanov & Carlo A. Bollino & Ceyhun Mahmudlu, 2017. "Modeling of Electricity Demand for Azerbaijan: Time-Varying Coefficient Cointegration Approach," Energies, MDPI, vol. 10(11), pages 1-12, November.
    2. Nino Fonseca & Marcelino Sánchez-Rivero, 2020. "Significance bias in the tourism-led growth literature," Tourism Economics, , vol. 26(1), pages 137-154, February.
    3. Hasanov, Mübariz & Araç, Aysen & Telatar, Funda, 2010. "Nonlinearity and structural stability in the Phillips curve: Evidence from Turkey," Economic Modelling, Elsevier, vol. 27(5), pages 1103-1115, September.
    4. Francisco de Castro Fernández & José Manuel González Mínguez, 2008. "The composition of public finances and long-term growth: a macroeconomic approach," Occasional Papers 0809, Banco de España.
    5. Sandberg, Rickard, 2016. "Trends, unit roots, structural changes, and time-varying asymmetries in U.S. macroeconomic data: the Stock and Watson data re-examined," Economic Modelling, Elsevier, vol. 52(PB), pages 699-713.
    6. Lau, Sau-Him Paul & Sin, Chor-Yiu, 1997. "Observational equivalence and a stochastic cointegration test of the neoclassical and Romer's increasing returns models," Economic Modelling, Elsevier, vol. 14(1), pages 39-60, January.
    7. Oliver Fritz & Peter Mayerhofer & Reinhard Haller & Gerhard Streicher & Florian Bachner & Herwig Ostermann, 2013. "Die regionalwirtschaftlichen Effekte der österreichischen Krankenanstalten," WIFO Studies, WIFO, number 46672, April.
    8. Masike, Kabelo & Vermeulen, Cobus, 2022. "The time-varying elasticity of South African electricity demand," Energy, Elsevier, vol. 238(PC).
    9. Kwakwa, Paul Adjei, 2014. "Energy-growth nexus and energy demand in Ghana: A review of empirical studies," MPRA Paper 54971, University Library of Munich, Germany, revised 01 Apr 2014.
    10. Venetis, Ioannis A. & Paya, Ivan & Peel, David A., 2003. "Re-examination of the predictability of economic activity using the yield spread: a nonlinear approach," International Review of Economics & Finance, Elsevier, vol. 12(2), pages 187-206.
    11. Franses,Philip Hans & Dijk,Dick van & Opschoor,Anne, 2014. "Time Series Models for Business and Economic Forecasting," Cambridge Books, Cambridge University Press, number 9780521520911.
    12. Adom, Philip Kofi, 2015. "Asymmetric impacts of the determinants of energy intensity in Nigeria," Energy Economics, Elsevier, vol. 49(C), pages 570-580.
    13. Amal MATALLAH & Amal MATALLAH, 2017. "Does fiscal policy spur economic growth? Empirical evidence from Algeria," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(3(612), A), pages 125-146, Autumn.
    14. Ibrar Hussain & Jawad Hussain & Arshad Ali & Shabir Ahmad, 2021. "A Dynamic Analysis of the Impact of Fiscal Adjustment on Economic Growth: Evidence From Pakistan," SAGE Open, , vol. 11(2), pages 21582440211, June.
    15. Yaya KEHO, 2011. "Tax Structure and Economic Growth in Cote dIvoire: Are Some Taxes Better Than Others?," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 1(4), pages 226-235, December.
    16. Goodwin, Barry K. & Holt, Matthew T. & Prestemon, Jeffrey P., 2019. "Nonlinear exchange rate pass-through in timber products: The case of oriented strand board in Canada and the United States," The North American Journal of Economics and Finance, Elsevier, vol. 50(C).
    17. Huang, Alex YiHou & Hu, Wen-Cheng, 2012. "Regime switching dynamics in credit default swaps: Evidence from smooth transition autoregressive model," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 391(4), pages 1497-1508.
    18. Lau, Sau-Him Paul, 2008. "Using an error-correction model to test whether endogenous long-run growth exists," Journal of Economic Dynamics and Control, Elsevier, vol. 32(2), pages 648-676, February.
    19. Muhammad Zakaria & Bashir Ahmed Fida, 2009. "Democratic Institutions and Variability of Economic Growth in Pakistan: Some Evidence from the Time-series Analysis," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 48(3), pages 269-289.
    20. repec:zbw:bofitp:urn:nbn:fi:bof-201505061169 is not listed on IDEAS
    21. Kostakis, Ioannis & Lolos, Sarantis & Doulgeraki, Charikleia, 2020. "Cultural Heritage led Growth: Regional evidence from Greece (1998-2016)," MPRA Paper 98443, University Library of Munich, Germany.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    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:pje:journl:article29sumii. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Samina Khalil (email available below). General contact details of provider: https://edirc.repec.org/data/aekarpk.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.