Financial Liberalization, Savings, and Economic Development in Pakistan

Khan, Ashfaque H.; Hasan, Lubna

doi:10.1086/452359

Cited by 42 publications

(38 citation statements)

References 5 publications

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“…We find that the risk premium owing to political risk is very large, lying somewhere between 7.5% and 12%. Khan and Lubna, 2001). …”

Section: Resultsmentioning

confidence: 99%

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How political risks and events have influenced Pakistan's stock markets from 1947 to the present

Masood

Sergi

2008

IJEPEE

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In this paper, we analyse Pakistan's political risks and events that have affected the country's stock markets since 1947. We collected data in the form of questionnaires from historians, economists, politicians, government officials, bankers and stock market analysts in Pakistan and make forecasts using Bayesian hierarchical modelling and Markov Chain Monte Carlo (MCMC) techniques. Findings show that the probability of an event in any year is relatively high with an average arrival rate of 1.5 events per year with no time trend. In addition, forecasts suggest that the level of political risk should be remaining unchanged for the foreseeable future. Finally, we find that Pakistan's political risk carries a risk premium of between 7.5% and 12%.

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“…We find that the risk premium owing to political risk is very large, lying somewhere between 7.5% and 12%. Khan and Lubna, 2001). …”

Section: Resultsmentioning

confidence: 99%

“…In 1995, the need was felt for an All Share Index to reconfirm the KSE-100 and also to provide the basis of index trading in futures. The KSE All Share Index was introduced in September 1995 (Khan and Lubna, 2001) 1 .…”

Section: Pakistani Stock Marketmentioning

confidence: 99%

How political risks and events have influenced Pakistan's stock markets from 1947 to the present

Masood

Sergi

2008

IJEPEE

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“…Hence, following Khan and Hasan (1998), Laumas (1998) and Pentecost and Moore (2006), it is proxied by the investment to income ratio, I/Y, which is likely to vary directly with the average real return on capital 2 . The models now become:…”

Section: Mckinnon's Complementarity Hypothesismentioning

confidence: 99%

“…For example, DeMelo and Tybout (1986), Edwards (1988) and Morriset (1993) focused on the investment equation, whereas Harris (1979) and Thornton and Poudyal (1990) modelled the demand for money function. The study of Fry (1978), Laumas (1990), Thornton (1990) and Khan and Hasan (1998) tested the complementarity hypothesis by estimating both investment (or savings) and the demand for money functions. Pentecost and Moore (2006) investigated the interdependence between the investment and money legs of the joint hypothesis in a simultaneous system of equations for India.…”

Section: Introcutionmentioning

confidence: 99%

A Critical Appraisal of McKinnon’s Complementarity Hypothesis: Does the Real Rate of Return on Money Matter for Investment in Developing Countries?

Moore

2010

World Development

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SUMMARYMcKinnon's (1973) complementarity hypothesis predicts that money and investment are complementary due to self-financed investment, so that a real deposit rate is the key determinant of capital formation for developing economies. This paper critically appraises this contention by conducting a vigorous empirical approach using panel data for 107 developing countries. The long-run and dynamic estimation results based on McKinnon's theoretical model are supportive of the hypothesis. However, when the investment model is conditioned by such factors as financial development, different income levels across developing countries, external inflows, public finance and trade constraints, the credibility of the hypothesis is undermined.

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“…Ahmed and Ansari (1995) used price variables as the relevant financial factors for growth in Bangladesh and found weak evidence in support of the McKinnon-Shaw hypothesis. However, Khan and Hasan (1998) in a study for Pakistan found strong support for the "McKinnon-Shaw" hypothesis. An important point worthy of note is the similarity between the structuralists and the repressionists which bothers on the efficient utilization of resources in the pursuit of an economic growth agenda.…”

Section: Introductionmentioning

confidence: 99%

Stock Market Performance and Sustainable Economic Growth in Nigeria: A Bounds Testing Co-integration Approach

Olabanji

2013

JSD

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The study examined the relationship between stock market performance and economic growth in Nigeria. It utilized the bounds testing co-integration procedure also known as autoregressive distributed lag estimation procedure. The empirical model combined key stock market indicators and some traditional macroeconomic variables to estimate the hypothesized relationship in the study. It found that in the long-run, overall output in the Nigerian economy is less sensitive to changes in stock market capitalization as well as the average dividend yield thereby casting doubt on the ability of the Nigerian stock market in its present level of development to serve as a barometer for measuring or predicting the overall health of the Nigerian economy as well as its direction over the long-run horizon. The other major finding in the study is that the long-run growth of the Nigerian economy is highly sensitive to marginal variations in interest rate which is suggestive that macroeconomic variables in the country are at present more useful in shaping the long-run direction of the Nigerian economy.

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Financial Liberalization, Savings, and Economic Development in Pakistan

Cited by 42 publications

References 5 publications

How political risks and events have influenced Pakistan's stock markets from 1947 to the present

How political risks and events have influenced Pakistan's stock markets from 1947 to the present

A Critical Appraisal of McKinnon’s Complementarity Hypothesis: Does the Real Rate of Return on Money Matter for Investment in Developing Countries?

Stock Market Performance and Sustainable Economic Growth in Nigeria: A Bounds Testing Co-integration Approach

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