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This paper investigates the long-run and short-run relationship between money supply and inflation in Pakistan, utilizing annual data spanning from 1981 to 2021. The key objective is to assess the impact of monetary policy, specifically money supply, on inflation dynamics in the country. To achieve this, the Autoregressive Distributed Lag (ARDL) bounds testing approach is employed, which is suitable for analyzing cointegration among variables with mixed integration orders. The results reveal both short and long-run cointegration between inflation, money supply, unemployment, and interest rates. Notably, unemployment demonstrates a negative correlation with inflation, while money supply and interest rates exhibit a positive relationship. These findings underscore the importance of dedicated policy measures to manage inflation effectively. The paper concludes by recommending the establishment of a policy implementation body and collaboration between the government and the central bank to ensure financial stability and control inflation through well-calibrated monetary and fiscal policies. [ABSTRACT FROM AUTHOR]

A significant corridor under the "Belt and Road Initiative" is announced by the government of China for numerous transport and energy projects. China focuses greatly on the sustainability of these projects, in accordance with Green Investment Principles. For this, environmental, social, governance, and technological considerations are taken into account. This paper offers a novel assessment of the impact of green sustainability under BRI and the current emission scenario in Pakistan. The question that needs to be addressed here is whether the projects under Belt and Road Initiative are as environment friendly as they claim. In the first phase of this study, we review theories establishing evidence based on existing literature to determine the influence of Belt and Road on economic development. In the next phase, we use Environment Kuznets Curve and apply estimates from Johansson's Cointegration Test to quantify the present environmental scenario of Pakistan and probable environmental risk portrayed by the China-Pakistan Economic Corridor (CPEC). This paper helps in determining the relationship between carbon emission and three major variables including energy consumption, economic growth, and foreign direct investment (FDI). Cointegration analysis is applied on time series data comprising of a 40 years' period from 1979 to 2019. The paper finds that (i) the belt and road corridors could substantially improve trade, foreign investment, and living conditions for citizens in participating countries; (ii) moreover, this study confirms the presence of one cointegrated equation suggesting the presence of a long term relationship between the CO2 and independent variables and a short run association running from EnC to CO2. The study also proposes a Green BRI Model which formulates a body that devises environmental performance standards, reviews procedures, and ensures that they get implemented on all CPEC projects. The Belt and Road Initiative increases emissions among participating countries. China and corridor economies need to adopt strict policy reforms that increase transparency, expand trade, improve debt sustainability, and mitigate environmental, social, and corruption risks. [ABSTRACT FROM AUTHOR]

This paper examines the quantile cointegration relation between human development, energy production, and economic growth by incorporating corruption into the model for Pakistan through Quantile Autoregressive Distributed Lag (QARDL) model covering the period from 1965 to 2016. The research findings indicate that the association is quantile dependent which provides some exciting results. The Wald test is applied that rejects the null hypothesis and confirms the short- and long-run relationship between the variables. The changes in human development and economic growth are responsible for past and current changes in energy production and corruption that is confirmed through the Error Correction Model (ECM). This paper provides some interesting findings that energy production is contributing positively to human development. Further, energy production contributes negatively to economic growth, while corruption contributes positively to economic growth. These findings will help to make policy measures such as environmental regulation to improve energy efficiency and anti-corruption policies which will improve income level and economic growth of Pakistan economy. [ABSTRACT FROM AUTHOR]

This paper made an attempt of econometric analysis of the investment situation in Pakistan for the period 1990-2017. The variables including domestic credit, national savings, lagged investment (IV), imports, and the real exchange rate were found to be the major factors affecting investment in Pakistan. Among all, the savings coefficient is positive and insignificant because of savings in Pakistan had no healthy pattern. Exchange rate has adversely affected the investment because of unidirectional causality. Specification and analytical tests supported reliability of the investment does not affect investment model from key econometric issues. The stability test shows that investment fluctuated during the 1990-2017 periods. OLS and GMM results are comparable. OLS estimation results are reliable since these variables do not suffer from Endogeneity problem. [ABSTRACT FROM AUTHOR]

This paper explores the dynamic linkages between income inequality, international remittances and economic growth using time series data over the period of 1976-2006 in case of Pakistan. The cointegration analysis based on the bounds test confirms the existence of a long-run relationship between income inequality, international remittances and economic growth. Our results reveal that income inequality and international remittances enhance economic growth. The causality analysis based on innovative accounting approach shows bidirectional causal relationship between income inequality and economic growth and same is true for international remittances and income inequality. International remittances are cause of economic growth but not vice versa. Although we find support for Kuznets hypothesis but Pakistan is yet to benefit, in terms of reducing the gaps of income inequality, from the international flow of remittances and economic growth. The paper argues that, from a policy perspective, there is an urgent need for policy makers in Pakistan to reduce the widening gap of income inequality by focusing on income redistribution policies and to go beyond the traditional factors in balancing income inequality. [ABSTRACT FROM AUTHOR]

This paper has investigated the role of education and Financial Market Development (FMD) on the Foreign Direct Investment (FDI) inflows in Pakistan from 1970-2019. In the short run, education has a positive effect on FDI inflows. 1% increasing of government's spending on education would increase 0.361% of FDI inflows in Pakistan. Moreover, the FMD has a positive effect on FDI inflows in the short run. 1% increasing FMD may increase 0.0496% of FDI in the short run. Both education and FMD are supporting the FDI inflows in the short run. Comparatively, education shows a larger effect on FDI than that of FMD in the short run. However, FMD and government spending on education could not affect the FDI inflows in the long run. This paper recommends supporting education and financial markets to attract FDI inflows in Pakistan. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is two folds: first, to analyze the long-run relationship between terrorism and key macroeconomic indicators (GDP growth, GDP per capita, inflation and unemployment) and second, to determine the direction of causality between these variables in Pakistan. Design/methodology/approach – The relationship between terrorism and various macroeconomic indicators is analyzed by applying Johansen cointegration analysis. Furthermore, the causality between terrorism and macroeconomic indicators is tested by applying Toda Yamamoto Granger causality test. Findings – The results show that there exists a long-run relationship between terrorism and key macroeconomic indicators. Furthermore, the results suggest that there exists a bi-directional causality between terrorism and inflation. The causality between GDP per capita, unemployment, GDP growth and terrorism is unidirectional. Originality/value – There is a lack of research work conducted to analyze the long-run relationship and direction of causation between terrorism and various macroeconomic indicators specifically for Pakistan. The current paper fills the gap in the literature by using sophisticated econometric techniques and recent data set to provide the evidence of the relationship between terrorism and various macroeconomic indicators. [ABSTRACT FROM AUTHOR]

There is a strong relationship between energy consumption (EC) and economic growth (EG) of a country. However, different sources of energy have different influence on EG of different countries. This paper attempts to identify the source of energy that efficiently spurs EG in Pakistan by exploring the short- and long-run relationship between EC and EG during 1972–2015. Breakpoint unit root test was used to investigate the stationarity properties of the variables along with structural break. Autoregressive distributive lag (ARDL) bound testing approach was used to determine the existence of long-run relationship among variables. The results of the ARDL model confirm the presence of cointegration among the variables. The findings confirm that renewable as well as non-renewable EC enhance EG in Pakistan. However, the magnitude of the coefficients and high significance level confirm that renewable energy (RE) spurs EG more efficiently than non-renewable energy. The study concludes that the government needs to increase investment in the development and exploration of RE resources to ensure sustainable EG in Pakistan. [ABSTRACT FROM AUTHOR]

In the recent times agriculture sector has been considered as one of the most affected sectors by climate change. Climatic factors that have direct influence on agricultural productivity are: rise in temperature, heavy rainfall, precipitation, floods and drought etc. This paper has empirically examined the effect of climatic variations on cotton productivity in Pakistan. In order to evaluate the climate change, three climatic variables (rainfall, max. temp and min temp) and three non-climatic variables (technology, fertilizer and area) had been used for analysis. Historical climate data from 1981-2015, was collected from Pakistan Meteorological Department, while data of Technology, fertilizer and cotton area has been gathered from Pakistan Economic Survey. ARDL bound testing econometric approach was employed to gauge the empirical estimates. The outcomes of cointegration shows that all climate variables have statistically substantial effect on cotton productivity in Pakistan. Both rain-fall and maximum temperature have positive effects while minimum temperature has negative effects on cotton production. Furthermore, both fertilizer and area have positive impact on cotton production. long run cointegrating relationship holds among climate change variables and cotton productivity. mitigating negative impressions of climate change requires strategies focusing on the adaptation of climate resistant cultivars. [ABSTRACT FROM AUTHOR]

Conventional specifications of import demand in LDCs have commonly been plagued by implausible and unstable parameter estimates. This paper shows the importance of imposing long-run income homogeneity and of including foreign exchange reserves when estimating import demand function for an LDC. Using several cointegration techniques, it is shown that there is one linear relationship among real imports, real income, relative import prices and real foreign exchange reserves. In addition, by employing stability tests for cointegrated systems by Hansen (1992a), the paper shows that only when foreign exchange reserves and long-run unit-income homogeneity are accounted for does a constant parameter, long-run equilibrium relation emerge for Pakistan. Also, the ensuing short-run dynamic model is constant and data-coherent. Finally, the study provides information on the speed of adjustment to equilibrium and the median and mean time lags of adjustments of real imports to changes in their determinants. The results indicate a quick response of real imports to changes in their determinants. [ABSTRACT FROM AUTHOR]

The current research delves into the implications of exchange rate fluctuations on commodity trade between Pakistan and Japan, utilizing the nonlinear autoregressive distributed lag method. While prior studies have predominantly utilized the symmetric cointegration approach, the current study posits that the limited assumption of symmetry between the exchange rate and the trade flows could have hindered the empirical findings. The research investigates both the symmetric and asymmetric effects of exchange rate fluctuations on 102 Pakistani industries that import from Japan and 62 industries that export to Japan at the industry level from 1980 to 2020. The outcomes indicate that in nearly half of the importing and exporting industries that engage in trade with Japan, there is evidence of a significant impact of asymmetric exchange rate fluctuations on trade flows in both the short and long term. The study suggests that policymakers should consider the industry-specific impact of exchange rate fluctuations on trade flows and implement targeted policies accordingly. Particularly, industries that benefit from currency depreciation should be encouraged through export incentives, while industries negatively affected by currency volatility should be provided with hedging mechanisms and other forms of support to mitigate their losses. [ABSTRACT FROM AUTHOR]

The high rate of urban population growth is one of the major problems constraining the growth of urban centres. The main aim of this paper is to examine the relationship between urbanisation, local food crop production and the tourism output of Pakistan. The findings show that a 1 per cent increase in local food crop production will increase tourism output by 1.77 per cent, at the 1 per cent level of significance, holding all other variables constant. There is a unidirectional causality running from local food crop production to urbanisation. This study has implications for policy‐makers and practitioners. [ABSTRACT FROM AUTHOR]

The current study is intended to analyze the long-run relationship between deficit in balance of payments (BOPs) and tourism for the period of 1976-2015 using the autoregressive distributed lag (ARDL) model. The findings of the paper exposed an indirect relationship between tourism and BOP deficit in the context of Pakistan economy, while deficit balance of trade, real effective exchange rate, and deficit in fiscal balance have a positive and significant association with the deficit in the BOPs in the long run. Based on the findings, it is recommended that policies should be devised that promote the tourism industry of Pakistan as it would be helpful in reducing the deficit in the BOPs. [ABSTRACT FROM AUTHOR]

This paper examines the relationship between exports and GDP in Pakistan using, annual data collected from 1976 to 2011. Co integration and Granger causality test were employed in the empirical analysis, using Augmented Dickey Fuller stationarity test, the variable proved to be integrated of the order one (1) at first difference. The paper is based on the following hypotheses for testing the co -integration and causality between GDP and export as to whether there is short run causality between GDP and export or whether there exists a long run association hip between GDP and Export The co integration test indicating an existence of long run equilibrium relationship between the two as confirmed by the Johansen cointegration test results. The ECM estimates gave evidence that there is SR causality coming from GDP to Export. Our findings indicate that there is unidirectional causality from GDP to exports in Pakistan but not vice versa [ABSTRACT FROM AUTHOR]

This study aims an investigating the impact of the agricultural sector on the economic growth of Pakistan. Johansen co-integration was used to show the long-run relation between livestock, fisheries, major crops, minor crops, gross capital formation, and economic growth in Pakistan. The data were taken from the Pakistan Economic Surveys for the period 1987-2017. The Vector-Correction Model results show that in the short run livestock and fisheries have a negative and insignificant effect on growth. The significant negative value of the Vector Error Correction Model coefficients shows that the parameters will do adjustment and return to equilibrium in the long run. The co-integration results showed a positive link between sub-sectors of agriculture and economic growth. The study is crucial for policy makers regarding the promotion of agricultural sector. The agriculture sector is very important for the growth of Pakistan’s economy, but it has not been given due importance. The study recommends the formulation of suitable policies to promote the livestock and fisheries sector in Pakistan to raise the sources of foreign revenue. [ABSTRACT FROM AUTHOR]

Purpose - The purpose of this paper is to investigate the relationship between financial development and agriculture growth employing Cobb-Douglas function by incorporating financial development as an important factor of production over the period 1971-2011. Design/methodology/approach - The autoregressive distributed lag (ARDL) bounds testing approach to cointegration with structural breaks is applied to examine long run relationship between the variables. The direction of causality is detected by vector error correction method (VECM) Granger causality test and robustness of causality analysis is tested through innovative accounting approach (IAA). Findings - The empirical analysis confirmed that the series are cointegrated for long run relationship between agriculture growth, financial development, capital and labor. The results indicated that financial development has positive effect on agricultural growth. This implies that financial development plays a significant role in stemming agricultural production and hence agricultural growth. Both capital and labour in the agriculture sector also add to agricultural growth. The Granger causality analysis revealed bidirectional causality between agricultural growth and financial development. The robustness of these results is confirmed by innovative accounting approach (IAA). Practical implications - This study has important policy implications for policy-making authorities to stimulate agricultural growth by improving the efficiency of the financial sector. Originality/value - This paper convincingly argues that there is a need for case-by-case study on such a project in view of each country's unique characteristics. [ABSTRACT FROM AUTHOR]

The paper examines the effect of real devaluation on economic growth. In the empirical model we include few other theoretically justified variables e.g., money supply, foreign remittances, and government spending as they appear relevant for Pakistan. The ADF unit root test is used for stationarity of the series. Also, to capture possible structural breaks due to currency regimes shifts, the Saikkonen and Lütkepohl unit root test is used. We apply the ARDL bounds testing approach to cointegration to explore a long run relation among the series; and the variance decomposition method and impulse response function for the direction of causality. The findings affirm cointegrating relation among the series. Real devaluation exerts contractionary effect on economic growth. The results should help in formulating a comprehensive trade policy including the use of competitive devaluation as a tool to correct balance of payments problems. [ABSTRACT FROM AUTHOR]

There is disagreement on the desirability of devaluation in the LDCs. Since the de-linking from USA dollar in January 1982, the Pakistan rupee has been losing its value vis-à-vis US dollar and other important currencies. The purpose of the paper was to see the response of domestic output to fiscal and monetary policies besides exchange rate and terms-of-trade. These policies have stable and long- run relationship with the domestic output. However, the impact of money supply and exchange rate is more robust than the other variables. Easy monetary policy has a favourable impact on domestic output. Fiscal discipline is the need of the hour because persistent and large budget deficit breeds inflation. [ABSTRACT FROM AUTHOR]

The objective of this paper is to empirically investigate a two-way statistical relationship between the agriculture environment and rural poverty. To recognise the relationship between the two variables, a time series, co-integration and Granger causality tests have been employed. Secondary data pertaining to Pakistan from 1980-2009 on rural poverty and environmental factors (such as commercial energy consumption, water availability and total cropped area) have been used for the analysis. The empirical results only moderately support the conventional view that rural poverty has a significant long-term casual effect on environmental proxies in Pakistan. The present study finds evidence of uni-directional causality between poverty and the environment in the context of the agriculture sector in Pakistan. [ABSTRACT FROM AUTHOR]

In a small open economy, the retail sector adds value with a lag to existing production and uses existing domestic production as an input. Therefore, demand side dynamics depend on the wholesale prices of the domestic goods, the prices of the imported goods, the nominal exchange rate, the level of indirect taxes, the marginal cost of retail production and interest rates. Hence, this mechanism provides a theoretical basis for causality from wholesale prices to consumer prices. Being motivated by this causal transmission mechanism, this paper tries to examine the causal relationship between wholesale prices and consumer prices in a small developing economy like Pakistan. Empirical methodology uses recently developed tests for the existence of a long-run relationship between wholesale prices and consumer prices. Typically, in applied analysis, testing for the existence of cointegration and causality can only be carried out once the time series properties of the data have been established. For example, tests for cointegration require the variables to be integrated to the same order, typically I(1), prior to estimation. By eliminating the need for unit root pre-testing, the tests applied here considerably simplify the inference procedure. They also reduce the potential for distortions in the inference due to the unknown properties of the testing sequence. Our findings include robust evidence that, for Pakistan, there is a bidirectional causality between wholesale prices and consumer prices. Feedback impact shows that influences from the wholesale price index (WPI) to the consumers' price index (CPI) is stronger or dominating as compared to feedback from CPI to WPI supporting the Cushing-McGarvey (1990) hypothesis. [ABSTRACT FROM AUTHOR]

This paper investigates the direction of causation between GDP representing economic growth, exports and its different categories, imports and world income. After experiencing vigorous import-substitution in the past decades, Pakistan adopted an outward-looking strategy in the late 1980s with an emphasis on export promotion. A strong and stable relationship between GDP and exports and bi-directional causality between manufactured exports and GDP has been found. Export promotion policy is pursued consistently with an emphasis on manufactured exports and this is most likely to contribute adequately to economic growth in the long run. [ABSTRACT FROM AUTHOR]

The paper empirically examines the cointegrating relationship between carbon emissions, energy consumption, trade openness and financial development in Pakistan using ARDL bounds test for cointegration procedure. Annual time series data is used for the period 1971–2011. The results reveal an inverted U-shaped relationship between carbon emission and energy consumption with a maximum threshold value of energy consumption per capita 640 kg of oil equivalent. Currently, the economy is operating below this level and therefore it is expected that carbon emission will continue to rise gradually over some time until the threshold level is reached. The lower than threshold level of energy consumption implies that scale and composition effects dominate the technology effect in terms of energy use. Further, the long-run results indicate that one percent increase in trade openness and financial development will increase carbon emission by 0.247% and 0.165%, respectively. The short-run elasticities are 0.122% and 0.087% for trade openness and financial development, respectively. The Granger causality results indicate a unidirectional causality from energy consumption, trade openness and financial development to carbon emission; and a bi-directional causality between energy consumption and financial development. In line with the results and given the growing focus on climate change effects in Pakistan, the paper discusses some policy issues for consideration and highlights the need to interpret elasticities with caution. [ABSTRACT FROM AUTHOR]

This paper investigates the effect of military spending on external debt in case of Pakistan for the period of 1973–2009. For this purpose, the autoregressive distributed lag bounds testing approach to cointegration is used to examine cointegration among the variables. The ADF, P-P, and ADF-GLS unit root tests are applied to test the integrating order of the variables. The Ordinary Least Square (OLS) and error correction method regressions are used to investigate the marginal impact of military spending on external debt in the long and short run. Our findings indicate the existence of cointegration that confirms the presence of a long-run relationship among military spending, external debt, economic growth, and investment. Further, our results reveal that a rise in military spending increases the stock of external debt; an increase in investment also increases external debt; however, there is an inverse effect of economic growth on external debt. An implication of the findings reported herein is that there is a need to formulate a comprehensive economic policy for curtailing external debt in case of Pakistan. [ABSTRACT FROM AUTHOR]

This paper investigates the long run relationship between military expenditures and economic growth in case of Pakistan and India using ARDL bounds testing approach for cointegration and Clemente-Montanes-Reyes approach for unit roots keeping structural breaks in a longer time series data. The study confirms the positive relationship between military expenditures and economic growth at the initial stages and then a negative relationship after a critical point for both countries. The short run results also confirm that the military expenditures can explain the per capita GDP in the short run. Importantly, the causality runs from military expenditures to GDP. [ABSTRACT FROM AUTHOR]

This paper is the first attempt to investigate the causal relationship between military spending, terrorist attacks and intensity of terrorism in case of Pakistan, by applying the ARDL approach to cointegration and innovation accounting approach for causality analysis. The results indicate that war on terror is the major determinant of military spending followed by terrorism intensity and the number of terrorist attacks respectively. The study further finds that terrorism intensity and terrorist attacks Granger-cause military spending but the reverse is not present. The failure of military measures to curtail terrorism and its intensity induces one to suggest greater involvement of civil intelligence agencies by raising their budgets instead of pure military budget. [ABSTRACT FROM AUTHOR]

In this paper, for the first time, we analyze the relation of sectoral FDI with domestic investment in Pakistan by using ARDL cointegration technique over a period of 1980–2012. Empirical findings show that aggregate FDI crowd in domestic investment, however, the effects of aggregate FDI on domestic investment in Pakistan cannot be generalized. The impact of FDI on domestic investment varies across sectors. The empirical findings in the study at sectoral level suggests that FDI in manufacturing and services sectors crowd in domestic investment while FDI in primary sector assert insignificant impact on domestic investment in Pakistan. Analyzing the reverse causal impact running from domestic investment to FDI, this study confirm that domestic investment is important in attracting FDI across the board in all the three sectors i.e. primary, manufacturing and services sectors. The positive role of FDI in manufacturing and services sectors and supportive role of indigenous investment infrastructure is of utmost importance for FDI to promote domestic investment in Pakistan. [ABSTRACT FROM AUTHOR]

This study experimentally recognizes the how the FDI of a nation is affected. For the very purpose the case of Pakistan has been taken for the time period of 1980 till 2019. The essential interest is the considering of in which way different components or pointers realizing exchange, monetary and related territory advancement spull Pakistan’s FDI. This study uses the regression and cointegration to recognize the components in explaining Pakistan FDI. Our Study thinks about Real expenditures on transport and correspondence by the open segment, Incidence of import obligation (an intermediary for duty rate), Change in genuine GDP, GNP Per Capita in USDollar terms, Depreciation recompense and the Rate of premium,Cost of the capital for the remote companies registered from accessible information on rate of return, Real FDI yearly streams in Pakistan. It included GDP Per Capita an wages test for concerned enthusiasm to work and market size theories. Every element showed right signal and are verifiably important beside pay rate and offer worth run down. The Study Analysis obviously under scores the activity of such methodology factors in captivating FDI & choosing their improvement in both long run and short run in Pakistan. This research work moreover portrays different essential impact of changes on FDI in Pakistan which are talked about in detail. [ABSTRACT FROM AUTHOR]

The relationship between total energy consumption and economic growth has been extensively explored in the past, but relatively few researchers have examined the increasing trend of energy consumption and development policies of a developing country like Pakistan as well as direction of causation of this relationship that remains controversial. The objective of this paper is to empirically investigate four alternatives but equally plausible hypotheses. These are as follows: (i) development factors cause total primary energy consumption, (ii) energy consumption cause development factors, (iii) there is a bidirectional causality between the two variables, and (iv) both variables are causality independent. To investigate the relationship between the two variables set, a time series cointegration and Granger causality tests have been employed separately. Secondary data pertaining to Pakistan from 1980 to 2009 has been used for analysis. The empirical result of causality strongly supports the bidirectional relationship between carbon dioxide emission and energy demand and industrialization and energy demand. There is a unidirectional causality relationship between the energy demand and population growth. However, neither agriculture value addition nor energy demand affect each other. [ABSTRACT FROM AUTHOR]

This paper establishes empirically the causal relationship and long run relationship between government expenditures and government revenues for the case of Pakistan from 1972 to 2007. Fiscal policy, a short run issue, but that can have testing macro economic consequences. Fiscal policy is viewed as an instrument to mitigate short run fluctuations. In this paper we examine tax/spend or spend/tax hypothesis. For this purpose, bi-directional Granger causality will be applied for instance flow from government expenditure to revenue or revenue to government expenditure. This issue has been concerned with intretemporal relationship between revenue and expenditure, so to check long run relationship Engel Granger cointegration will be used. For checking data stationary, non stationary unit root, and ADF/DF approaches give the proof for this hypothesis. The results show the presence of co-integration between government expenditure and tax revenue variables implying evidence of a stable long-run relationship between them. The Granger Causality test suggest the unidirectional causality flow from government expenditure to tax revenue. [ABSTRACT FROM AUTHOR]

This paper examines the patterns of electricity demand in Pakistan over the period 1970–2006 using autoregressive distributed lag technique to cointegration. Long run and short-run price and income elasticities are examined for the national level and for the three major consumer's categories—households, industry and agriculture. The overall results suggest that income and price elasticities possess expected signs at aggregate and disaggregate levels in the long run as well as in the short run. The error correction terms possess expected negative signs and are highly significant with reasonable magnitudes. Furthermore, the estimated long run and short-run electricity demand functions remains stable over the sample period. The results thus convey important information to the agents operating in the electricity market regarding the pricing policies and helps in planning the future strategy of electricity demand management. [ABSTRACT FROM AUTHOR]

Malnutrition among children is pervasive in South Asia and there are also reports of overnutrition. To better understand this phenomenon, we need a composite measure. However, the existing measures such as CIAF (Composite Index of Anthropometric Failure) and its revised version have ignored the overnutrition aspect of the phenomenon. This study proposes an extended version of CIAF which also considers overnutrition. This new measure was compared with the existing measures by using data from 1990 to 2018 for three selected South Asian countries including Pakistan, India and Bangladesh. We also examined the effects of socioeconomic and environmental variables on the outcome variable. The results reveal that the new measure (ECIAF) is better at measuring the phenomena. The burden of overall malnutrition has been decreased in the region. However, an increase in the concomitant prevalence of wasting and underweight is observed in both Pakistan and India and stunting and overweight is observed only in India. Besides, political stability, prevalence of undernourishment, anemia in children, mother's education, household size, dependency ratio, air pollution and unimproved sanitation are significantly correlated with childhood malnutrition. The findings also testified to long-run cointegrating relationship among the variables. [ABSTRACT FROM AUTHOR]

This study empirically investigates a monetary policy reaction function for South Asian economies by incorporating financial stability as an additional policy objective in the central bank's loss function. Empirical results are estimated by applying auto-regressive distributed lag (ARDL) approach to cointegration and vector autoregressive (VAR) approach using time-series data of five South Asian countries, namely, Pakistan, India, Bangladesh, Nepal and Sri Lanka. Estimated results indicate that monetary policy significantly reacts to the level of financial stability in all countries. The result further suggests that central banks would tighten monetary policy if output gap widens and exchange rate depreciate. In addition, central banks of Pakistan and India do not respond significantly to inflation gap. [ABSTRACT FROM AUTHOR]

This study empirically investigated existence of U-Shaped relationship between workers' remittances inflows(WRI) and per capita income(PCI) in Pakistan. WRI can increase or decrease growth in per capita income depending on whether positive effects outweigh negative effects or vice versa. It is possible that in initial phase remittances affect growth negatively and in the later phase positively or vice-versa implying non-linearity. The study applied Johansen's Cointegration method to find long run relationship among variables using time series annual data from 1991-2017. The Error Correction Method was used to reconfirm long run relationship. The sources of time series data were World Development Indicators, World Bank and Pakistan Labour Force Survey (Various issues), Pakistan Bureau of Statistics. The results indicated that at first stage WRI affect per capita income negatively and later on after threshold level (WRI as percentage of GDP equal to 2.34) affect positively thus confirming existence of U-shaped relationship in case of Pakistan. The negative and significant coefficient of lagged ECM term in short run model confirmed convergence of the series towards equilibrium. It takes time for the benefits of WRI to outweigh their costs in the developing countries. The policy implication of the study is that optimal use of WRI is important for improvement in PCI in Pakistan. Policy makers need to understand nonlinear relationship where remittances affect growth positively after achieving certain threshold level. [ABSTRACT FROM AUTHOR]

This paper explores the presence of dynamic causality between economic growth, energy consumption and CO2 emissions for Pakistan. We first test for the presence of bi-variate long run relationships between these variables using Johansen-Julius co-integration test. The robustness of the long-run relationship results has been examined using ARDL approach to cointegration. Existence of Grangers' long run, short run and strong causalities has been studied in a VECM framework. The short run, long run and strong Granger causality results indicate the presence of bidirectional causalities between energy consumption, economic growth and the CO2 emissions. Implications of the results suggest that government should focus on building resources for ensuring adequate energy supplies in the economy by gradually increasing the share of renewable energy resources in the overall energy mix. Footprints of Denmark, Norway and Germany in Europe and Mauritius in Africa can be followed who have gradually increased energy production from renewable resources over the years. Furthermore, emission abatement activities should be made the central agenda in energy and environmental policies of Pakistan for reduction in damages associated with CO2 emissions. [ABSTRACT FROM AUTHOR]

This paper reinvestigates the relationship between urbanization and energy consumption in case of Pakistan for the period of 1972Q1-2011Q4 by employing the STIRPAT (Stochastic Impact by Regression on Population, Affluence and Technology) model. We have employed the ARDL bounds testing approach to cointegration in the presence of structural breaks stemming in the series to count for these missing elements in other studies. Finally, the VECM Granger causality approach has been applied to examine the causal relationship between the variables. Our results show that urbanization adds in energy consumption. Affluence (economic growth) increases energy demand. Technology has positive impact on energy consumption. An increase in transportation is positively linked with energy consumption. The causality analysis indicates the unidirectional causality running from urbanization to energy consumption. [ABSTRACT FROM AUTHOR]

This paper examines the dynamics of electricity demand in Pakistan at the aggregate and sectoral levels over the period 1978–2012. Panel cointegration test and Fully Modified Ordinary Least Squares method is employed to determine the long run relationship between electricity consumption, real income, real price of electricity and domestic price of non-energy products. The results reveal that electricity demand is more responsive to changes in income than changes in prices at the aggregate and disaggregate levels. Short run and long run income elasticities are positive and statistically significant, supporting the conservation hypothesis. It appears from the results that long run price elasticities are negative and significant at the aggregate level and for the agriculture, commercial, residential sectors and public utilities. The short run price elasticities are significant but low in magnitude, which implies that changes in electricity price exert minimal effect on the electricity consumption in Pakistan. The domestic price of non-energy products is positive and significant for aggregate sample in the short run, the domestic price of non-energy products exert significant negative (positive) impact on electricity demand in the agriculture (industrial) sectors. The results, thus, provide important information to the agents operating in the electricity market regarding the income and pricing policies and helps in planning the future strategy of electricity demand management. [ABSTRACT FROM AUTHOR]

In the race of economic development, the environment is compromising, especially in developing countries. Literature has highlighted many factors that have been causing CO2 emissions. The identification of factors behind environmental degradation is important to control them for a sustainable environment. In this regard, this study also identifies the role of the shadow economy for CO2 emission in the case of Pakistan. Furthermore, the impact of official/formal, GDP and true/actual GDP are also checked on CO2 emission function along with energy consumption and urbanization in Pakistan. The annual time series data from 1972 to 2018 is utilized. A novel dynamic autoregressive distributed lag simulation is employed to confirm the existence of cointegration. Moreover, this novel approach also estimates, stimulates, and plots to show a positive and negative change in variables on graphs. The estimated results confirm the long-run association between CO2 emission and its determinants in the case of Pakistan. A positive and significant impact of shadow, official and true GDP along with energy consumption and urbanization illustrate that shadow economy is contributing toward urbanization via huge investment in real estate that leads to higher urbanization which further increases the energy consumption particularly nonrenewable energy, natural gas, and coal consumption. Government and policymakers should introduce new controls and strengthen the existing ones to control CO2 emission via a decrease in the size of the shadow economy. Moreover, unplanned and irregular urbanization should be regular and documented to control illegal/shadow activities, hence, decreasing the nonrenewable energy consumption. [ABSTRACT FROM AUTHOR]

International trade is key to boosting the economic growth and development of an economy. Hence, it becomes critical to analyze its determinants. The present study attempts to empirically analyze the determinants of trade exports of Pakistan with its top-5 trade partners. The prior literature suffers from biased findings due to deploying the aggregate data and ignoring the likely asymmetries in the drivers of the exports. The present study has used the monthly data of oil prices and macroeconomic uncertainty in order to empirically investigate the determinants of exports. For the purpose of analysis, several advanced econometric (quantile unit root, cointegration, and granger causality) tests and (quantile-on-quantile regression) techniques are utilized to handle the issue of asymmetries in the modeled series. The findings reveal a positive and significant relationship between oil prices in Pakistan and exports. Furthermore, macroeconomic uncertainty has a significantly negative impact on the country's exports. Based on the results, key policy implications are provided. [ABSTRACT FROM AUTHOR]

This study aims to investigate the impacts of traditional and green economic growth on poverty, income inequalities, and environmental degradation in the case of South Asian economies. In this regard, the study collects data for the period 2000 to 2018 from five South Asian economies (Pakistan, India, Sri Lanka, Nepal, and Bangladesh) from world development indicators (WDI). The study applies second-generation unit root test and co-integration technique, CIPS unit root and Westerlund co-integration tests, to establish the stationarity of the series and co-integration relationship among variables. Furthermore, this study utilized dynamic ordinary least square (DOLS) and fully modified ordinary least square (FMOLS) models to investigate the long-run empirical estimates. The study finds that both traditional economic growth (GDP) and green economic growth (GGDP) have a negative impact on poverty and inequality; however, GGDP contributes more than traditional GDP to reducing poverty and inequality. Moreover, the study shows that economic growth has a positive long-run impact on environmental degradation while GGDP has a negative and significant long-run association with environmental degradation. The study recommends that policymakers should develop policies to develop green economic growth to save the environment and for the reduction in poverty and income inequalities in south Asian economies. [ABSTRACT FROM AUTHOR]

The current research aims to investigate the impact of financial development on the ecological footprint in Pakistan from 1980 to 2018 by controlling economic growth, the square of economic growth, and energy consumption. The structural break unit root test results show that all variables are stationary at first difference. The bound F-test for cointegration affirmed the indications of a long run connection between the parameters in the discussion. Moreover, we use the non-linear autoregressive distributed lag model to check the non-linear links in establishing the associations between financial development and ecological footprint. The outcomes suggest an asymmetric connection between financial development and ecological footprint because positive and negative shocks in financial development have different effects on ecological footprint. The findings reveal that the impact of the positive shock on financial development is negative but insignificant. Besides, the impact of the negative shock on financial development is positive and statistically significant. It implies that a 1% increase in the negative shock of financial development causes a 0.0877% rise in ecological footprint. The coefficient of economic growth is significant at a 1% level of significance. In the long run, a 0.4471% increase in ecological footprint is associated with a 1% increase in economic growth. However, the coefficient of the square of economic growth is negative but insignificant. Thus, the environmental Kuznets curve hypothesis is not valid in Pakistan. Likewise, energy consumption positively affects the ecological footprint. The results of short run estimates correspond to the long run estimates. As a policy suggestion, the current study suggests expanding green financial development in Pakistan by emphasizing more on Sustainable Development Goals. [ABSTRACT FROM AUTHOR]

A fundamental economic question is how nations can achieve long-term economic growth. One of the responses to this question is the export-led growth (ELG) hypothesis, which claims that rising exports are a key predictor of economic growth. In response, this study empirically investigates the asymmetric (nonlinear) and causal relationship between exports and economic growth using annual data from 1973 to 2020 in Pakistan. The asymmetric cointegration among variables is confirmed by the non-linear autoregressive distributed lag approach with a structural break. Long-term estimates conform to theoretical expectations, except for imports which are found to influence growth negatively. Further, human and physical capital both are positively contributing to economic growth. The major finding is that the effects of exports on economic growth are asymmetric, and economic growth in Pakistan reacts positively to the rise and fall of exports. The causality analysis supports the above findings and confirms a long-run asymmetric unidirectional causality from exports (with positive/negative change) to economic growth in Pakistan, clearly demonstrating the ELG hypothesis. From a policy perspective, the findings suggest that Pakistan should adopt and implement an export growth strategy to achieve economic prosperity as part of its development policy. [ABSTRACT FROM AUTHOR]

Primarily, the current study seeks to explore the influence of financial development, economic growth, trade openness, non-renewable and renewable energy utilization on carbon dioxide (CO2) emission in Pakistan from 1990 to 2017. The findings of structural break unit root tests indicated that a few variables are stationary at the level and others integrated at the first difference. The bound F-test and Johansen cointegration tests confirmed the evidence that a long-run relationship exists among concerned variables. The long-run results explore that financial development and renewable energy penetration significantly accelerate the environmental quality, while economic growth, non-renewable energy utilization, and trade openness are responsible for deteriorating the environmental quality. The results from the short-run estimate explore that non-renewable energy utilization and trade openness significantly reduce the environmental quality while renewable energy sources are beneficial for environmental quality. Moreover, the current study discovered the unidirectional Granger causality relationship from economic growth, trade openness, non-renewable and renewable energy penetration to carbon emission in Pakistan. The outcomes of this study provide some insightful policy suggestions to overcome the detrimental effect of environmental degradation. [ABSTRACT FROM AUTHOR]

Appropriate economic choices are very much dependent on stability of prices. It will bring certainty regarding purchasing power of the money. This research uses Johenson cointegration approach covering time duration from 1980 to 2018. The empirical estimates of this study shows that in long run all explanatory variables (unemployment, government consumption expenditures, unit price of imports, interest rate and money supply) have momentous influence in accelerating inflation in Pakistan. The findings show that decrease in unemployment and increase in unit value of imports will enhance inflation in long run. Due to the decrease in the government consumption expenditure there will be low investment, low production, and increased aggregate demand associated with high inflation. There exists positive relation between interest rate and inflation. The increase in money supply enhances inflation. Lagged value of error correction model is significant having appropriate sign. Furthermore, this study uses Granger Causality test to check the existence of uni or bi directional relationship among highlighted variables. [ABSTRACT FROM AUTHOR]

Food security is a growing concern around the world and the agricultural sector plays a significant role in solving this problem to a large extent. In particular, the developing world has been highly affected by the food security challenge due to its large population since the last few decades. This study explored the impact of the green revolution on food security in Pakistan using annual time series data over the period 1975–2017. The findings of the Johansen co‐integration and F‐bounds tests found that the green revolution positively and significantly improves food security in Pakistan. The results of the autoregressive distributed lag model explored that agricultural machinery, agricultural credit, use of fertilizers, high quality seeds, fuel consumption and rise in area under cereal crops are the significant factors of the green revolution, which improve the food security in Pakistan. This study recommends that policies must be designed to guarantee farmers' access to quality production inputs. [ABSTRACT FROM AUTHOR]

The study estimates whether the role of non-banking financial institutions in managing economic vulnerability contributes to whether non-banking financial institutions' role in managing economic vulnerability contributes to higher economic welfare at the public level in Pakistan. The empirical estimation is carried out on secondary data ranging from 1990 to 2020. Using autoregressive distributed lag estimation technique, short-run and long-run effects on non-banking financial institutions are examined. The study contributed to the following: the short- and long-run connection between economic development and non-banking financial institutions (NBFIs) was found, while an experimental outcome indicated a causal connection between NBFIs and financial development improvement. Moreover, the non-banking financial institutes reduce the economy's real sector due to excessive risk in the financial sector. Our results reveal a correlation between non-banking financial integration and economic growth changes related to an expansion in loan recipients. The nominal interest rate significantly explains the economic growth of Pakistan. NBFI part in the liquidity procedure of budgetary resources is said to be in charge of financial development in creating nations. General consequences of the examination on NBFIs demonstrated a positive effect on the financial development of Pakistan. From policy viewpoint, the study suggests multiple policy implications to the practitioner of non-banking financial institutions and the national economy to curtail the adverse effects of economic vulnerability on national economic welfare in the public. [ABSTRACT FROM AUTHOR]

Over the past decades, emerging stock markets have started to significantly contribute to economic growth through mobilizing long-term capital by pooling funds, facilitating savings and investments into profitable projects and improving corporate governance structure. A plethora of empirical studies is devoted to investigate the determinants of different capital markets but due to highly controversial and inconclusive findings about macroeconomic determinants, this study contributes to the body of existing literature by empirically investigating the macroeconomic forces that drive the stock market development of Pakistan from 1980 to 2019. By applying Ng-Perron and Zivot-Andrews unit root tests (to determine the integrating orders of variables) and Autoregressive Distributed Lag (ARDL) bounds testing approach, our results confirm cointegration among variables and exhibit the significant positive impact of economic growth and banking sector development on stock market development and negative affect of inflation, foreign direct investment and trade openness on it in long run. At the same time, the short run results show a significant relationship of economic growth, inflation and foreign direct investment with stock market development. Our study has some important policy implications. [ABSTRACT FROM AUTHOR]

The current research is aimed to study the dynamic association between macro economic variables and exchange rate in Pakistan. For this purpose the study analyzes quarterly time series of the relevant variables from 1998 quarter 1 to 2012 quarter 4. The study tests the proposed hypotheses using econometric models that are widely accepted and practiced in academic research in the areas of economics and finance. In the first place the study investigates as to whether alltime series variables (exchange rate and the set of seven (7) macroeconomic variables) are stationary or not. Then the study investigates in multivariate form, the co-integration properties of the variables under investigation. Further the study applies Granger-cause macroeconomic variables or vice versa in the multivariate form. Along this line, the study also applies the Granger-causality test in the bi-variate form to investigate the lead-lag relationship and hence establish the direction of influence i.e. uni-directional. The study results suggest that there is a long-run association between exchange rate and inflation at 10% significance level. The Granger-causality test suggests that the direction of influence is more from inflation to exchange rate than from exchange rate to inflation (though both are statistically insignificant). The results from the Granger-causality test suggest that money supply leads exchange rate i.e. money supply Granger-cause exchange rate (a uni-directional causality). The study reports finding that indicate a bidirectional causality between exchange rate and total reserve less gold. A rise in the total reserve less gold causes exchange rate of Pak Rupee to appreciate and vice versa. The study also reports statistically significant inverse relationship between exchange rate and exports. The findings from the Granger-causality test suggest that exchange rate and industrial production share statistically significant relationship. The study failed to report evidence to support Share price index in multi-variate co-integration test as well as Granger-causality test. The study reported that both balance of trade and exchange rate were cointegrated. Further the study reports that exchange rate Granger-cause balance of trade in the short-run. [ABSTRACT FROM AUTHOR]

In this empirical research, thepurpose was to investigate the impact of trade openness and budget deficits on public debt in Pakistan. In this regard, data was examined spanning from 1975 to 2020. To map both long-run and short-run interactions, we used the autoregressive distributed lag (ARDL) method of co-integration along with ECM approaches. The results show that variables such as public debt, budget deficit, trade openness, and inflation have long-and short-term co-integration. Also, trade openness's coefficient's negative sign with value of-0.759 confirms negative relationship between public debt, trade openness and shows that a 1% upsurge in trade openness will bring a 75.9% decrease in public debt's growth in Pakistan. While budget deficit and inflation both possess a positivesign of coefficients and a positive link with public debt, the coefficient of budget deficit is 0.498, which depicts that a 1% escalation in budget deficit will lead to a rise in public debt of 49.8 percent. In conclusion, Pakistan's national debt is rising due to budget deficit andinflation, but it is falling due to trade openness. To reduce budget deficit, government should balance domestic andexternal debtso as to sustain desired position. So, it issuggestedthe government actively trade internationally to minimize the public debt. [ABSTRACT FROM AUTHOR]

The objective of this study is to identify the impact of the shadow economy on renewable and nonrenewable energy consumption at aggregated and disaggregated levels over the period of 1972Q1-2018Q4 in Pakistan. This study carries nonlinear/asymmetric time series analysis such as quantile unit root test for stationary of data series, newly developed quantile cointegration (Xiao, J. Econom. 150:248–260, 2009) for existence of long-run relationships and novel quantile causality approach (Troster, Econom. Rev. 37, 850–866, 2018) are used to identify direction of causality over the quantiles. The results confirm that quantiles of shadow economy cointegrate with the quantiles of energy consumption at aggregated and disaggregated levels. The results of quantile regression show that a shadow economy has a positive and significant impact on renewable and nonrenewable energy consumption at aggregated and disaggregated levels in all quantiles starting from extreme low quantiles to extreme high quantiles. Furthermore, the results of quantile causality illustrate a unidirectional causality running from underground economy to fluctuations in renewable, nonrenewable, and total energy consumption. More specifically, disaggregated energy consumptions such as oil, gas, nuclear, hydro, and gas are also caused by shadow economy, generally in low and high tails/quantiles. [ABSTRACT FROM AUTHOR]

There is much discussion on the relationship between economic growth and fiscal variables. However, empirical support to show the relation between the two variables has mainly based either on direct observation of the data or on some parallel based analyses. These approaches are inadequate to identify the nature of the underlying linkage between economic growth and fiscal variables. The objective of this paper is to empirically investigate a two-way statistical relationship between the fiscal variables (such as government expenditures, government revenues and budget deficit) and economic growth by using time series, co-integration and Granger Causality tests over a period of 1980-2010. The result supports three key conclusions. First, government expenditures have a significant negative effect on real economic growth. Tax receipts have a positive effect on real growth and finally, the size of budget deficit have a significant negative effect on real growth of Pakistan. The causality results only moderately support the conventional view that economic growth has significant long run casual effect on fiscal variables in Pakistan. [ABSTRACT FROM AUTHOR]