Comparative analysis of monetary and fiscal Policy: a case study of Pakistan
This study investigates the comparative effect of fiscal and monetary policy on economic growth in Pakistan using annual time series data from 1981 to 2009. The cointegration result suggests that both monetary and fiscal policy have significant and positive effect on economic growth. The coefficient of monetary policy is much greater than fiscal policy which implies that monetary policy has more concerned with economic growth than fiscal policy in Pakistan. The implication of the study is that the policy makers should focus more on monetary policy than fiscal to enhance economic growth. The role of fiscal policy can be more effective for enhancing economic growth by eliminating corruption, leakages of resources and inappropriate use of resources. However, the combination and harmonization of both monetary and fiscal policy are highly recommended.
|Date of creation:||Dec 2010|
|Date of revision:||Dec 2010|
|Publication status:||Published in Nice Research Journal 1.3(2010): pp. 58-67|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Elliott, J W, 1975. "The Influence of Monetary and Fiscal Actions on Total Spending: The St. Louis Total Spending Equation Revisited," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 7(2), pages 181-192, May.
- Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
- Leonall C. Andersen & Jerry L. Jordan, 1968. "Monetary and fiscal actions: a test of their relative importance in economic stabilization," Review, Federal Reserve Bank of St. Louis, issue Nov, pages 11-23.
- A. O. Olaloye & S. I. Ikhide, 1995. "Economic sustainability and the role of fiscal and monetary policies in a depressed economy: The case of Nigeria," Sustainable Development, John Wiley & Sons, Ltd., vol. 3(2), pages 89-100.
- Ali F. Darrat, 1984. "The Dominant Influence of Fiscal Actions in Developing Countries," Eastern Economic Journal, Eastern Economic Association, vol. 10(3), pages 271-284, Jul-Sep.
- Shahid Ali & Somia Irum & Asghar Ali, 2008. "Whether Fiscal Stance or Monetary Policy is Effective for Economic Growth in Case of South Asian Countries?," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 47(4), pages 791-799.
- Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:30850. 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: (Joachim Winter)
If references are entirely missing, you can add them using this form.