Economic Growth and Its Determinants in Pakistan

khan

2019

READS

Growing population in the present globalized world is a challenge for the developing to engage the increasing labour force in productive environment. The creation of new employment opportunities is not easy to handle with existing resources (lack of capital both physical and financial) and became a more intense challenge for policy maker. Fairley free transaction also affect employment/unemployment in developing countries. Therefore, this study aimed to examine the impact of globalization on unemployment in case of Pakistan for the period of 1980-2017. Globalization is measured by three different forces i.e. Trade flows, FDI flow and Remittances flow. To estimate the responsiveness of unemployment to globalization ARDL co-integration techniques is employed. Bound test confirmed co-integration relationship between the variables under consideration. The results of short run and long run estimates showed that globalization forces affected unemployment in Pakistan. Globalization in the shape of trade affects unemployment directly while the impact of remittances is negative to unemployment. The impact of FDI is positive but insignificant. Therefore, this study suggests that proper attention should be paid toward policy formulation regarding trade and remittances inflow to increase employment opportunities in Pakistan. Globalization should be perused with adequate policies that will certainly smooth macroeconomic environment of Pakistan.

Section: 2supporting

confidence: 91%

Globalization and Macroeconomic Instability: Evidence from Unemployment in Pakistan

khan

2019

READS

International Migration

“…Shahbaz et al. () used quarterly data of Pakistan over the period 1991‐2007 and found a positive relationship in growth and remittances. Financial development had a positive while trade openness endorsed negative impact on growth.…”

Section: Theoretical and Empirical Review Of Literaturementioning

confidence: 99%

What Drives Remittances from Saudi Arabia to Pakistan? Home Versus Host Country's Economic Conditions

Umair

Waheed

2017

Saudi Arabia is the largest source country of remittances to Pakistan since the 1970s. This study examined the impact of home versus host country’s economic conditions on remittances from Saudi Arabia to Pakistan. The ARDL bounds testing is used on the annual data set from 1973 to 2014. The study concluded that economic growth in the host country and economic crises in the home country increase remittances. 1% decrease in domestic output increases remittances by 2.79% while 1% increase in sending country’s output growth increases remittances by 5.2% in the long‐run. The bilateral trade has a positive while financial deepening has a negative impact on inflows. The impact of oil shock is insignificant. We suggest cautious foreign policy as remittances depend significantly on the host country’s economic condition that is not directly under the control of the home country but remittances can be sustained with bilateral trade.

South African J Economics

“…() are complimented by Shahbaz et al . () and Shahbaz (). Jalil and Feridun () reported that financial development, capitalization and trade openness increase economic growth but real interest rate declines it.…”

Section: Literature Reviewmentioning

confidence: 99%

Re‐Visiting Financial Development and Economic Growth Nexus: The Role of Capitalization inBangladesh

Shahbaz

Rehman²,

Muzaffar

2014

Self Cite

This paper revisits the relationship between financial development and economic growth in Bangladesh by incorporating trade openness in production function using quarter frequency data over the period of 1976-2012. We applied combined Bayer-Hanck cointegration to examine cointegration amongst variables in the presence of structural breaks. The results show that financial development facilitates economic growth but capitalization impedes it. In addition, trade openness stimulates economic growth. Labour is also positively linked with economic growth. The causality analysis reveals the feedback effect between financial development and economic growth. Trade and labour Granger cause economic growth. This paper provides new insights for policy making authorities to use financial development and trade openness as tool to sustain economic growth in long run. This paper also suggests policy makers to utilise capitalization in proper way to sustain economic growth for long run.