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Multivariate-based Granger causality between financial deepening and poverty: the case of Pakistan

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  • Ijaz Rehman

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  • Muhammad Shahbaz

    ()

Abstract

This paper deals with the empirical investigation of causal relationship between financial deepening, economic growth and poverty reduction using quarter frequency data in case of Pakistan over the period of 1972–2011. We applied the autoregressive distributed lag model bounds testing approach by incorporating structural breaks stemming in the series. The order of integration of the variables is examined by applying structural break unit root test. Our empirical exercise indicated that the long run relationship between financial deepening, economic growth and poverty reduction exists in case of Pakistan. The causality analysis implied that causality results are sensitive with the use of proxy for poverty reduction. Copyright Springer Science+Business Media Dordrecht 2014

Suggested Citation

  • Ijaz Rehman & Muhammad Shahbaz, 2014. "Multivariate-based Granger causality between financial deepening and poverty: the case of Pakistan," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(6), pages 3221-3241, November.
  • Handle: RePEc:spr:qualqt:v:48:y:2014:i:6:p:3221-3241
    DOI: 10.1007/s11135-013-9952-z
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    Cited by:

    1. Saqlain Latif Satti & Muhammad Shahid Hassan & Fozia Hayat & Sudharshan Reddy Paramati, 2016. "Economic Growth and Inflow of Remittances: Do They Combat Poverty in an Emerging Economy?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 127(3), pages 1119-1134, July.
    2. Salah Abosedra & Muhammad Shahbaz & Kishwar Nawaz, 2016. "Modeling Causality Between Financial Deepening and Poverty Reduction in Egypt," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 126(3), pages 955-969, April.
    3. Uddin, Gazi Salah & Shahbaz, Muhammad & Arouri, Mohamed & Teulon, Frédéric, 2014. "Financial development and poverty reduction nexus: A cointegration and causality analysis in Bangladesh," Economic Modelling, Elsevier, vol. 36(C), pages 405-412.
    4. repec:jda:journl:vol.51:year:2017:issue1:pp:343-359 is not listed on IDEAS
    5. Sheilla Nyasha Author-Name: Yvonne Gwenhure & Nicholas M. Odhiambo, 2017. "Poverty and Economic Growth in Ethiopia: A Multivariate Causal Linkage," Journal of Developing Areas, Tennessee State University, College of Business, vol. 51(1), pages 343-359, January-M.

    More about this item

    Keywords

    Financial deepening; Economic growth; Poverty;

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • E00 - Macroeconomics and Monetary Economics - - General - - - General

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