Macroeconomic effects of fiscal policy in Pakistan: a disaggregate analysis

Munir, Kashif; Riaz, Nimra

doi:10.1080/00036846.2019.1616074

Cited by 10 publications

(9 citation statements)

References 27 publications

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“…It is crucial to understand that changes in the levels, changes in timing, and changes in the composition of government spending and taxation do have a significant impact on the wellbeing of the economy. Munir & Riaz (2019b), the brains behind the fiscal policy reaction function and transmission mechanism estimation argued that pro-cyclical fiscal policy is a more effective response to business cycle changes in thriving (boom)periods. On that basis, they concluded that fiscal policy transmission is not effective, however, fiscal policy contemporaneous response is functional but not progressive.…”

Section: Literature Reviewmentioning

confidence: 99%

Impact of Fiscal Policy on Financial Development in Sub-Sahara Africa

Ricky-Okine¹,

Apreku–Djan²,

Akrofi³

et al. 2023

IJARAFMS

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Economic theory suggests that fiscal policies affect economic growth with extant studies proving this relationship in the context of countries in sub-Sahara Africa (Durusu-Ciftci et al., 2017). However, few studies have examined how fiscal policy impacts financial development leading to economic growth. The study, therefore, sought to examine how fiscal policies affect financial sector development in sub-Sahara Africa and to provide empirical support or otherwise to the conclusions of theory. Adopting the Fixed Effect (FE) estimator, the study on one hand revealed a positive significant relationship between fiscal policy and financial development and that Fiscal Policy influences financial development. Hence, the study showed that the implementation of fiscal policies by governments in SSA directly and positively leads to the financial sector development; thus leading to economic growth. However, the effect of fiscal policy on the financial development does not significantly affect economy growth compared as expected. On policy direction, government should focus on expanding the tax net as a way to increase its revenue and also to stimulate financial development. Again, policies towards financial inclusion should be aggressively pursued in SSA as these have practical implications for financial sector growth.

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Section: Literature Reviewmentioning

confidence: 99%

Impact of Fiscal Policy on Financial Development in Sub-Sahara Africa

Ricky-Okine¹,

Apreku–Djan²,

Akrofi³

et al. 2023

IJARAFMS

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“…On the contrary, the study of Ramazan et al (2013), applying OLS, reveals a positive impact of fiscal deficit. Munir and Riaz (2019) conducted a disaggregated analysis of the impact of fiscal policy in the context of Pakistan. Utilizing VAR framework, the study indicates positive impact of the government consumption, investment, and development spending on real GDP.…”

Section: Introductionmentioning

confidence: 99%

A Dynamic Analysis of the Impact of Fiscal Adjustment on Economic Growth: Evidence From Pakistan

Hussain

Ali

et al. 2021

Sage Open

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This study claims to be the first in assessing the short-run and long-run impacts of both the size and composition of fiscal adjustment on the growth in Pakistan. Empirical calibration has been made on Mankiw et al.’s model, while the Autoregressive Distributed Lag (ARDL) techniques of Pesaran et al. have been employed to carry out the estimation. To cure the problem of degenerate cases, the ARDL techniques have been augmented with the model of Sam et al. The analysis supports the hypothesis of “expansionary fiscal contraction” in the long run. The analysis reveals that the spending-based adjustment enhances the economic growth, whereas the tax-based adjustment would reduce the growth in the long run in the case of Pakistan. The Granger causality test indicates that the fiscal adjustments have been weakly exogenous, thereby allowing feedback effect from the economic growth toward the fiscal adjustment. Thus, the objective of sustained economic growth can be achieved through the spending-based consolidation measures.

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“…Fiscal policy must be correlated with the economic cycle, because economic activity cannot be linear. According to the Keynesian theory, the application of countercyclical fiscal policies is a measure that can have beneficial effects on the whole economy during periods of recession, and contributing to the stabilization of output in the business cycle (O'Sullivan & Sheffrin, 2003), government expenditure and taxes being useful tools to stimulate the economic activity (Munir & Riaz, 2019). Thus, the government should intervene in recessions and depressions through monetary and fiscal policy (Blinder, 2017).…”

Section: Introductionmentioning

confidence: 99%

The Effects of Fiscal Policy Shocks on the Business Environment

Dobrotă

Vodă

Dumitraşcu

2021

Journal of Business Economics and Management

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Fiscal policy influences economic conditions through public spending and taxes, generating positive or negative impulses, both on short and long term. The present research focuses on analysing the effects of the discretionary changes in the fiscal policy in seven post-communist countries of the European Union during the period 2000–2018. The autoregressive distributed lag model (ARDL) has been applied in order to obtain the convergence rates to equilibrium with a clear analysis of the periods needed to achieve the long-run fiscal sustainability. Also, the error correction vector model (VECM), which is based on the autoregressive vector (VAR) model, has been used in the second part of the analysis focusing on the Cholesky factorization of innovations. Impulse-response functions aiming to estimate the response of government expenditures to the shock produced by three macroeconomic variables have been identified.

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Macroeconomic effects of fiscal policy in Pakistan: a disaggregate analysis

Cited by 10 publications

References 27 publications

Impact of Fiscal Policy on Financial Development in Sub-Sahara Africa

Impact of Fiscal Policy on Financial Development in Sub-Sahara Africa

A Dynamic Analysis of the Impact of Fiscal Adjustment on Economic Growth: Evidence From Pakistan

The Effects of Fiscal Policy Shocks on the Business Environment

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