The present endeavor explores relationship between producer and consumer price indices by employing new techniques. We have utilized the time series monthly (1992M1-2007M6) data while ARDL Bounds Testing and Johanson Cointegration Approach is used to determine the long run association and robustness of long run results. Toda & Yamamato (1995) and Variance Decomposition for causal rapport between producer and consumer prices are applied. DF-GLS & Ng-PerronTests are also applied to inquire the order of integration for running variables.Results have verified the existence of long run relationship between producer and consumer prices, and their association is robust in long span of time in the case of small developing economy like Pakistan. Causal results through Toda and Yamamato's (1995) technique asserts that there is two-way causality but it is stronger from producer to consumer prices and same with Variance Decomposition Method. Finally Feed back impacts show that feedback influence from PPI to CPI is stronger or dominating as compared to feedback from CPI to PPI, which support "Cushing and McGarvey (1990) hypothesis". Keywords: D24, D12, C20 IntroductionThe relevant literature reveals that consumer and producer price indices are considered as indicators of inflation and current producer prices lead consumer prices in future [Caporale, (2002) & Darestani and Arjomand, (2006)]. Researchers found causal relationship between producer price and consumer price from both sides simultaneously [Engle, (1978); Sims, (1972); Silver and Wallace, (1980); and Guthrice, (1981)] (Note 1). But Colclough and Langee (1982) argued that causality between the said variables can run from producer prices to consumer prices or might be bidirectional after applying the Granger & Sims tests and theoretically causality expects to run from consumer to producer prices. Over a long span of time, Mehra (1991) & Huh and Trehan (1995) concluded that consumer price index leads labor cost, which is major part of produce price index and this mechanism contradicts the chain view. In contrary, Emery and Chang (1996) summed up "workers compensation growth adjusted for productivity has no power to anticipate the inflation".Further more Cushing and McGarvey (1990) indicated that feedback from producer prices to consumer prices is greater than that from consumer to producer prices that can be concluded as "consumer prices have very light incremental power". Further more, they argued that addition of money supply does not affect prevailing feedback from producer to consumer and causal link is consistent with the supple price model showing strong demand effects. Contrarily, Clark (1995) concluded that pass-through effect from producer prices to consumer prices may be weak and found "causality is unidirectional that runs from producer prices to consumer prices". Theoretical BackgroundIn literature producer price index is utilized frequently as an important indicator for consumer price index. Mostly causal relationship is related to sup...

This research paper investigates the linkage between the financial development and the economic growth in Bahrain during the period 1981 to 2013. The motivation for kicking off on the Bahrain economy is attributed on account of paradigm shift manifested in moving from hydrocarbons purveyor to being in the financial services and industrial hub. Given the limiting factor embedded with the bivariate causality structure, the paper encompasses savings as an intermittent variable. The paper makes an earnest investigation to gauge the long run and short run relationship among financial development, savings and the economic growth. Time series data are taken for a time span of 33 years . Data are culled from the World Bank Database. Financial Development measured by M2(broad money)/ GDP is represented by F, Economic growth measured by GDP per capita is represented by Y and Savings measured by Domestic Savings/GDP is represented by S. No long term co-integration is found among the variables under consideration as represented by Johansen test. Through the employment of multiple econometrics tools under Vector Auto Regression (VAR) framework, it is unearthed that the empirical evidence supports neither the supplyleading hypothesis nor the demand -following hypothesis for the Bahrain. While savings and economic growth have bi-directional causality at 10% level of significance. In responding to inexplicit results between the purported variables, the current study recommends that more wide ranges of reforms in the financial services are entailed, so as to escalate further the economic growth in the Bahrain economy.

This research empirically investigates the long and short run causal relationships between economic growth, financial depth and lending rate in the unique economic setup of Saudi Arabia where 92% of total GDP comes from oil exports. Study uses two proxies for financial depth namely liquid liability indicator and banks claim to the private sector to GDP ratio, while economic growth is measured by real GDP per capita. This study intends to get answers for such questions as, if financial depth effects or causes economic growth in an oil based economy, and does lending rate have any relationship with financial depth or economic growth. Using the Johansens co-integration, Granger causality and Vector Error Correction Model (VECM) the study finds a single co-integrated equation which establishes a long run relationship among the variables. Finding suggests that financial depth causes lending rate which is in contradiction with most of the available literature; the study tries to explain this type of causality under the present circumstances. Furthermore no short term significant relationship exists among the variables as reflected by the results of the Wald Test, that is due to the unique political and economic setup under consideration.

This study is an effort to explain and establish a relationship among foreign direct investment, financial development and economic growth in Saudi Arabian context for the period of 1970 to 2015 by employing Vector Auto Regression (VAR) and modified Granger Casualty Models. The result of Johansen co-integration test illustrates that no long run co-integration can be established among the variables. VAR has established a link between economic growth, financial development and foreign direct investment. The Granger causality test also confirms that economic growth causes foreign direct investment and financial development which is a unidirectional causality running from economic growth towards foreign direct investment and financial development. No significant causality can be observed empirically between foreign direct investment and financial development. This feature can be attributed to the fact that Saudi Arabian economy is still heavily dependent on its oil resources which is the driving force behind growth. Impulse Response Function has been utilized in order to observe the response to the shocks among the variables.

Human development has gained much significance in economies.This study highlight the role of institutional quality, financial development,and industrialization in human development in selected Asian countries. The human development index is used as a dependent variable. The study has used the GMM technique for this analysis. The study results demonstrate that institutional quality, financial development, industrialization, and trade openness have played a significant and positive role in determining the human development of selected Asian countries. It is recommended that the government should provide a more stable environment to encourage more production, investment, and trade to enhance the living standard and human development of the selected economies. It is concluded that financial development may improve human development. There is a need for more transparency and improved institutional quality for human development.