Purpose of the study: The current study estimated the impact of current account gaps (CAGAP) on inflation in South Asian countries, namely, Pakistan, Bangladesh, India, Nepal, and Sri Lanka. Methodology: CAGAP is estimated through macroeconomic fundamentals by applying panel time series data methodology from 1990 to 2018. We adopted the bias-corrected least square dummy variable (LSDVC) estimation technique for the time series macro and dynamic panel to find the impact of CAGAP on inflation. Principal findings: CAGAP negatively affected consumer price inflation rate while Lag of inflation, trade openness, age dependency, and oil prices positively affected inflation rate in the selected sample countries. In LSDVC, the Blundell and Bond (BB), Arellano-Bond (AB), Anderson and Hsiao (AH) estimates are determined while system and difference GMM estimates also confirmed the results. Therefore, LSDVC-AB is selected from the three versions of LSDVC as baseline regression based on higher significance and lower standard error. Applications of the Study: CAGAP affects inflation, so it should be estimated annually in all these countries for macroeconomic stability as IMF annually estimates for developed countries in an external sector report. It is worthwhile to estimate CAN regularly and watch it for CAB evaluation and future Adjustment. Based on the results, the study recommends that tailored policies and interventions focus on the structural distortions and slow-changing factors to eradicate CAGAP. Novelty/ Originality of the Study: A few empirical studies have scrutinized the role of CAB on macroeconomic variables. No empirical study on CAGAP and its consequences are available in the selected region's existing literature to the best of our knowledge.

This article examines the impact of trade liberalization, that is, reduction of tariff and non-tariff barriers on trade balance, in Pakistan over the period 1982–2013. The results reveal that reduction of average effective tariff rate improves trade balance in the short run, while lowering of non-tariff barriers deteriorates trade balance in the long run as well as in the short run. The analysis also suggests that depreciation of real effective exchange rate and foreign income causes an improvement in the trade balance, whereas domestic income deteriorates it. The negative association between the reduction in non-tariff barriers and trade balance worsens sustainability of current account of the balance of payments in Pakistan.

This study investigates the impact of exchange rate changes on consumer prices (commonly known as exchange rate pass-through (ERPT)) in Pakistan for the period 1995M1 to 2009M3. The study estimates short-run and long-run ERPT in Pakistan while taking into account the existing real exchange rate misalignment (RERM). The results suggest that the ERPT to consumer price inflation in Pakistan is very low (close to zero). The impact of the previous periods’ misalignment on inflation is found significant in managed exchange rate regime. However, the overall sample misalignment does not affect inflation. The impact of foreign inflation on domestic inflation is positive and statistically significant. JEL classification: F31, F41, E31 Keywords: Pass-through, Misalignment, Inflation

This study has empirically investigated impact of globalization on aggregate and agricultural employment in Pakistan for the data period 1986-2017. Globalization is proxied by variables trade openness, foreign direct investment, workers’ remittances and exchange rate. Other explanatory variables are real GDP, gender based wage gap and labor force. The study has applied Johansen’ cointegration technique and Error Correction Model to estimate the long run and short run relationships. The findings of the study indicate that in the long run trade openness has negative whereas FDI has positive effect on aggregate as well as agricultural employment in Pakistan during the data period. Interestingly, exchange rate and workers’ remittances affect aggregate and agricultural employment differently. Other important finding is that real GDP and gender based wage gap also deteriorate aggregate and agricultural employment in Pakistan. The study concluded that globalization in the form of trade openness has not supported employment whereas FDI enhanced employment in Pakistan. Policy makers need to consider sector specific effects of globalization while designing policies to achieve inclusive growth in Pakistan.

This study has investigated the impact of globalisation on gender-based gaps in the labor market (GBGLM) of Pakistan for the period 1982-2017. Particularly, the study has estimated the impact of trade openness(OPEN), foreign direct investment (FDI), workers’ remittance inflows(WRI) and exchange rate(ER) on gender-based labour force participation rate differential (LFPRD) and wage differential (WD). The study has applied the Autoregressive Distributed Lag (ARDL) model and Johansen’s cointegration approach on two models estimated for LFPRD and WD. The error correction models (ECM) have confirmed an error correction mechanism as reflected by negative and significant coefficients of lagged ECM terms. The study has applied all relevant diagnostic tests to ensure the validity of empirical findings. The results of the study indicated that in the long run, OPEN reduced LFPRD and WD, whereas, FDI augmented LFPRD. ER depreciation decreased LFPRD and augmented WD. WRI also augmented LFPRD and WD. The study concluded that OPEN and Real GDP are prominent factors in reducing WD and LFPRD of Pakistan, whereas, FDI and WRI augmented LFPRD. This is a very important finding in the context of the stagnant real sector of Pakistan where agriculture and industry have performed lower than rapidly growing services sector of Pakistan. Since most of the exports emanate from the real sector of Pakistan, therefore, relatively more focus on real sector as compared to financial inflows can play a crucial role in reducing GBGLM of Pakistan. The policy implication based on results is that to reduce GBGLM of Pakistan, trade liberalisation with special focus on the commodity-producing sector is right policy option in Pakistan