The Impact of Money Supply on Inflation in Pakistan

Nasir, Rakia; Waheed, Rozina; Nasir, Wajiha

doi:10.52587/jems020102

Cited by 2 publications

(2 citation statements)

References 20 publications

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“…This means that the budget deficit is a negative function of inflation in Nigeria, and that increasing the fiscal deficit may lessen the country's inflationary tendencies. This finding is consistent with the findings of Hassan, Zia, and Baig (2020), who evaluated the influence of money supply and inflation on Pakistan's fiscal deficit and discovered a negative link between inflation and fiscal deficit. This result, however, contradicts the findings of Ebipre and Amaegberi (2020), who investigated the relationship between money supply and inflation rate in Nigeria from 1981 to 2017.…”

Section: 1: Discussion Of Findingssupporting

confidence: 92%

“…The study found that M2 impact positively and significantly on inflation. Masood, Mubashar and Mirza (2020) used data from 1990 to 2017 to analyze the connection among inflation, fiscal deficit and money supply in Pakistan. The collected data was analyzed using regression analysis and cointegration tests and the result disclosed that inflation is positively connected to money supply and negatively related fiscal deficit in Pakistan.…”

Section: Empirical Reviewmentioning

confidence: 99%

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Responses of Inflation to Fiscal Deficit and Money Supply in Nigeria

2024

EJBM

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Inflation rate plays important role in economic stability of a nation since it is one of the significant macroeconomic variables that affect virtually every aspect of the economy. The study's focus was to ascertain the responses of inflation to shocks in money supply and fiscal deficit in Nigeria. Data used was obtained from Central Bank of Nigeria statistical bulletin from 1981 to 2021. The study adopted vector auto regression (VAR), impulse response functions and variance decomposition for its analysis. Findings of this study revealed that inflation responded negatively to variations in the money supply in Nigeria, Fiscal deficit is a negative function of inflation in Nigeria, thus increase in fiscal policy would likely reduce inflationary tendencies in the country. The study further suggested that government should increase accessibility of funds for borrowing and embark on prudent management of borrowed funds so as to curb inflation in Nigeria.

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Section: 1: Discussion Of Findingssupporting

confidence: 92%

Section: Empirical Reviewmentioning

confidence: 99%

Responses of Inflation to Fiscal Deficit and Money Supply in Nigeria

2024

EJBM

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Determinants of Inflation in Pakistan: A Comprehensive Analysis of Macroeconomic Variables (1991–2022)

Ali,

Kumar,

Gusev

2024

Mir novoj jekonomiki

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This research paper investigates the determinants of inﬂation in Pakistan from 1991 to 2022, focusing on key macroeconomic variables such as imports, GDP growth rate, GDP per capita, military expenditure, population growth, total debt service, and unemployment. The main objective is to analyse the impact of these variables on inﬂation and provide policymakers with actionable insights. Utilizing annual time series data from reliable source World Bank WDI, the study employs descriptive statistics, correlation analysis, ADF unit root tests, regression analysis, and the Autoregressive Distributed Lag (ARDL) model. The ﬁndings reveal signiﬁcant interdependencies among the examined variables. The correlation analysis shows strong positive relationships between inﬂation and imports and military expenditure, while GDP per capita and population growth negatively correlate with inﬂation. OLS results conﬁrm that imports, GDP growth, and total debt service signiﬁcantly raise inﬂation, whereas GDP per capita, military expenditure, and population reduce inﬂation. The ARDL model reveals that, in the long run, imports, GDP growth, and debt service positively affect inﬂation, while GDP per capita, population growth, and unemployment exert downward pressure. Short-run dynamics indicate that inﬂation quickly adjusts to economic shocks, with imports and GDP growth having an immediate impact. These ﬁndings highlight the importance of managing imports and debt, while promoting economic growth to maintain price stability. The policy implications emphasize the need for targeted monetary policies to manage imports and optimize debt service strategies, as well as policies aimed at enhancing economic growth and increasing per capita income. Effective debt management and strategic military spending are also vital for maintaining price stability. Despite its comprehensive analysis, the study identiﬁes gaps such as the need for further exploration of structural breaks and non-linear effects in inﬂation dynamics, and the impact of external factors like global oil prices. The signiﬁcance of this research lies in its contribution to understanding the complex economic interactions inﬂuencing inﬂation in Pakistan, providing a crucial resource for policymakers to develop effective strategies for economic stability in developing economies.

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The Impact of Money Supply on Inflation in Pakistan

Cited by 2 publications

References 20 publications

Responses of Inflation to Fiscal Deficit and Money Supply in Nigeria

Responses of Inflation to Fiscal Deficit and Money Supply in Nigeria

Determinants of Inflation in Pakistan: A Comprehensive Analysis of Macroeconomic Variables (1991–2022)

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