Inflation is regarded as regressive taxation against the poor. The most visible impact of inflation in recent times is its effect on real output, relative prices, taxes and interest rates. The study focuses to examine demand side and supply side determinants of inflation in Pakistan on economic and econometric criterion and also to investigate causal relationships among some macroeconomic variables. For that purpose, study has undertaken time series data for the period from 1972 to 2010. Long run and short run estimates have been investigated using Johansen Co-integration and Vector Error Correction approached. Causal relationships have been observed using Granger causality test. Data on macroeconomic variables have been selected from Handbook on Statistics of Pakistan 2010. The findings of the study reveal that in the long run consumer price index has found to be positively influenced by money supply, gross domestic product, imports and government expenditures on the other side government revenue is reducing overall price level in Pakistan. Long run elasticities of Price level with respect to money supply, gross domestic product, government expenditures, government revenue and imports are 0.61, 0.73, 0.32, -1.37 and 0.41 respectively. In the short run, last year consumer price index and two years before government revenue are directly involved in enhancing consumer price index of current year. Improvement in gross domestic product and government expenditures is necessary but it is suggested that there should be optimal level for all of them so that price level should be stable.
International trade has its importance in economic growth of a country. Country that is good in international trade means that it is stable in its economic conditions. International trade also shows the relationship of a country with other countries. Pakistan also has relationship with other countries in terms of international trade throughout different years. Conducted study focus on international trade impact on economic growth in Pakistan. For this purpose, yearly data set is taken from period of 1972 to 2012. ARDL regression analysis is used to deal with see the long run and short run relationship among the effect of worldwide exchange on financial development of Pakistan. Descriptive statistics, KPSS unit root test and VIF are obtained for analysis purpose. Eview software is used to obtain results in analysis. The finding of this examination shows that outside direct speculation, genuine successful worldwide rate and urbanization have huge and negative effect on financial development. As worldwide exchange is arrangement instrument may have more impacts in future to the impact on exchange aggressiveness
Education is always considered as the major determinant for the development of any economy. Enrollment at various levels also shows that how much education is common within the citizens of the country. Considering the importance of enrollment, the current study examines the influence of some macroeconomic variables on various levels i.e. primary, secondary, higher, college, professional and university enrollment in Pakistan. Time series data has been gathered on consumer price index, government revenue, employed labor force, government expenditure, and health expenditure for the period from 1972 to 2010. For long run estimates, Johansen Co integration test is used and short run estimates are taken through error correction model. The results of the study exhibit positive association of employed labor force, government expenditure and health expenditure with primary, secondary, higher, college, professional and university enrollment in Pakistan. On the other side, consumer price index and government revenue have been found to be inversely influencing enrollment at various levels. Short run results are also much favorable for the economy and reveals convergence towards long run equilibrium due to any disturbances in the short run period. At the end study gives some policy implications that government should decrease consumer price index and tax rate and to increase government expenditure in terms of education and health for higher enrollment rates in Pakistan.
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