Financial Development, Fiscal Policy and Economic Growth: The Role of Institutional Quality in Pakistan

Munir, Sidra; Rao, Zia Ur Rehman; Sana, Saba

doi:10.32350/jfar/0102/02

Cited by 4 publications

(3 citation statements)

References 20 publications

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“…On balance, causality runs from financial development to economic growth for Pakistan. Our findings are in line with Qayyum & Sheikh (2005) and Munir & Sana (2019). The financial measures, DCTP/GDP, M2/GDP, and M3/GDP are causing economic growth in Pakistan (Table 1).…”

Section: Results Discussionsupporting

confidence: 91%

A Causal Analysis of Financial Development and Economic Growth

Islam

Ahmad

2022

Preprint

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In terms of cause and effect, financial development and economic growth relationship has been a major empirical issue for researchers and policy makers. This study explores the causal linkages between financial development and economic growth catering for country specificity and structural shocks pertaining to different cross sections in SAARC and ASEAN countries by calling in the bootstrapping technique proposed by Kónya (2006). We considered the panel estimation to allow for contemporaneous correlations and performed Wald test for Granger Causality with country specific bootstrap critical values catering for structural breaks. Empirical investigation reveals the existence of both the demand and supply leading phenomena for the selected period of 1980–2017. The direction of causality is sensitive measures and proxies used for financial development.

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Section: Results Discussionsupporting

confidence: 91%

A Causal Analysis of Financial Development and Economic Growth

Islam

Ahmad

2022

Preprint

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“…Extant empirical studies show relationships between financial development and economic growth; thus uni-directional, bi-directional etc. (Anwar and Cooray, 2012;Durusu-Ciftci et al, 2017;Munir et al, 2019 ). One of the government's policy tools to strengthening the financial sectors is Fiscal policy.…”

Section: Introductionmentioning

confidence: 99%

Impact of Fiscal Policy on Financial Development in Sub-Sahara Africa

Ricky-Okine¹,

Apreku–Djan²,

Akrofi³

et al. 2023

IJARAFMS

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Economic theory suggests that fiscal policies affect economic growth with extant studies proving this relationship in the context of countries in sub-Sahara Africa (Durusu-Ciftci et al., 2017). However, few studies have examined how fiscal policy impacts financial development leading to economic growth. The study, therefore, sought to examine how fiscal policies affect financial sector development in sub-Sahara Africa and to provide empirical support or otherwise to the conclusions of theory. Adopting the Fixed Effect (FE) estimator, the study on one hand revealed a positive significant relationship between fiscal policy and financial development and that Fiscal Policy influences financial development. Hence, the study showed that the implementation of fiscal policies by governments in SSA directly and positively leads to the financial sector development; thus leading to economic growth. However, the effect of fiscal policy on the financial development does not significantly affect economy growth compared as expected. On policy direction, government should focus on expanding the tax net as a way to increase its revenue and also to stimulate financial development. Again, policies towards financial inclusion should be aggressively pursued in SSA as these have practical implications for financial sector growth.

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“…Fiscal policy explains a situation where governments utilize expenditure alongside taxation measures to determine how the economy is functioning. A government would ordinarily utilize fiscal policy to ensure a robust and sustainable economic system and cut down the incidence of poverty (Munir et al 2019 ). The application of fiscal policy to achieve desired macroeconomic objectives have gained traction throughout the decades alongside the present economic downturn, as economies have intervened with policies to reignite growth with stimulus packages to ameliorate adverse effects of economic downturn among the vulnerable in society.…”

Section: Introductionmentioning

confidence: 99%

Does external debt as a new determinants of fiscal policy influence sustainable economic growth: implications after COVID-19

Chien

Chau

Aldeehani

et al. 2022

Econ Change Restruct

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External debt correlation and the sustainable economic development pathway within the South Asian sub-region is analysed in this research paper. The longitudinal root-analysis, the pooled ordinary least square, quantile estimation, and output estimation were utilized to evaluate the data obtained from the World Bank Development Indicators for the period of 2000–2018. We discovered that total external debt and external debt services affect 39% plus 31%, respectively, after the robust regression analysis was carried out. Besides that, the findings demonstrate direct expansionary impacts of fiscal policy crosswise in developing economies within the study timeframe. Remarkably, the advancements in state establishments encourage the “gathering impact” of fiscal policy implementation. The findings depict that the entire circumstances set a stiffer restraint on public expenditure, indicating a self-losing fiscal austerity situation which entails the impact of the company’s liabilities. Inversely, the unrestrained countercyclical policy bars the knock-on impact of external problems, resulting in an improved economic system activity performance as well as decreasing the probability of economic predicaments after COVID-19.

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Financial Development, Fiscal Policy and Economic Growth: The Role of Institutional Quality in Pakistan

Cited by 4 publications

References 20 publications

A Causal Analysis of Financial Development and Economic Growth

A Causal Analysis of Financial Development and Economic Growth

Impact of Fiscal Policy on Financial Development in Sub-Sahara Africa

Does external debt as a new determinants of fiscal policy influence sustainable economic growth: implications after COVID-19

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