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

This research paper examines the causal relationship between imports and economic growth along with the impact of economic growth on imports in the perspective of Pakistan using the Granger causality test and simple regression test. The research aims to evaluate the relationship between the respective variables by using the data for a period of 40 years from 1975 to 2014. The result revealed that there is a causal relationship between imports and economic growth and found the evidence of bi-directional causality between imports and economic growth in Pakistan. Similarly, the result showed that there is a significant causal relationship between economic growth and imports in Pakistan. On the basis of Granger’s causality test, the positive and significant relationship between the respective variables reflects that imports of capital goods such as machinery group, chemicals, equipment, etc. translate in to the economic productivity and growth along with the imports of consumer goods that also contributes towards the export oriented productivity indirectly. For further research, the right mix of the categories and products should be examined to accelerate the pace of economic growth through imports in Pakistan. Keywords: Import, Economic Growth, Granger Causality, Bi-directional, Causal Relationship DOI : 10.7176/JESD/10-10-08 Publication date :May 31 st 2019

This study researches on the financial development and economic growth in Pakistan. The study demonstrates the correlation connecting financial development and economic growth from the range of time, 1974 - 2014. For checking the stationarity of variables, Augmented Dickey-Fuller (ADF) and Philip-Peron (P.P) unit root technique is applied. To elaborate long-run relationship, ARDL (autoregressive distributed lag) and Bound test is conducted. By ARDL technique, study investigate that Gross Domestic Product, Money supply, Exchange rate, Gross fixed capital formation, Domestic Savings and Trade Openness are assimilated. According to research findings: economic growth directly related to money supply (M2) and domestic saving in long-run but money supply illustrates insignificant impact. The study uses GDP as endogenous variable and represents Economic growth. While M2 as exogenous variable which represents financial development and financial liberalization. Current researches seek to establish direct relation of economic growth with trade openness and money supply. Pakistani researchers aim to examine the association of economic policies with financial satisfaction over the globe.

In this paper we examined the interaction between greenhouse gas emissions, nuclear energy, coal energy, urban agglomeration, and economic growth in Pakistan by utilizing time series data during 1972–2019. The stationarity of the variables was tested through unit root tests, while the ARDL (autoregressive distributed lag) method with long and short-run estimations was applied to reveal the linkages between variables. A unidirectional association between all variables was revealed by performing a Granger causality test under the vector error correction model (VECM) that was extracted during the short-run estimate. Furthermore, the stepwise least squares technique was also utilized to check the robustness of the variables. The findings of long-run estimations showed that GHG emissions, coal energy, and urban agglomeration have an adversative association with economic growth in Pakistan, while nuclear energy showed a dynamic association with the economic growth. The outcomes of short-run estimations also show that nuclear energy has a constructive association with economic growth, while the remaining variables exposed an adversative linkage to economic growth in Pakistan. Similarly, the Granger causality test under the vector error correction model (VECM) outcomes exposes that all variables have unidirectional association. Furthermore, the outcomes of the stepwise least squares technique reveals that GHG emissions and coal energy have an adverse association with economic growth, and variables nuclear energy and urban agglomeration have a productive linkage to the economic growth in Pakistan. GHG emissions are no doubt an emerging issue globally; therefore, conservative policies and financial support are needed to tackle this issue. Despite the fact that Pakistan contributes less to greenhouse gas emissions than industrialized countries, the government must implement new policies to address this problem in order to contribute to environmental sustainability while also enhancing economic development.

This study investigates the impact of credit allocation given by Deposit Money Banks (DMB) to the agricultural and manufacturing sectors on the performance of the Nigerian economy from 1986 to 2020. In achieving this objective, the study employs the Autoregressive Distributed Lag (ARDL) to evaluate the short-run and long-run impacts as well as the Granger causality tests to examine the nature of causality. The ARDL bounds test reveals the presence of long-run co-integration among the variables. The ARDL technique discloses that DMB credit allocation to the manufacturing sector has a negative and insignificant effect on economic growth in both the first and second lags. The ARDL technique also shows that DMB credit allocation to the agricultural sector has a positive and insignificant effect on economic growth in Nigeria. The granger causality test shows that there is no causal relationship between DMB credit to the manufacturing and agricultural sectors and economic growth. The study recommends that the government through financial authorities must ensure that DMB credits are monitored and channeled appropriately to the agricultural and manufacturing sectors so as to prevent such funds from entering private pockets.

T he main objective of this paper was the investigation of the impact of the trade openness on economic growth in Pakistan. We have been employed both the Johensen and Autoregressive Distributed Lag (ARDL) Co-integration together with ECM Techniques for the period 1975-2016. The empirical estimated results are the sound evidence that there exists a short-run and long-run positive and stable cointegration among the variables. Our empirical findings further depict that trade openness and foreign direct investment has a significant positive impact on economic growth in Pakistan. Moreover, the Granger causality test also confirms the bidirectional causality between trade openness and economic growth. It is, therefore, concluded that trade openness can play a key role as the economic growth of Pakistan is concerned.

ABSTRACTThis study examines the role of regulatory quality toward the achievement of India's sustainable economic growth. India's economy is known for its policy structure that guarantees infrastructural development and ease of doing business (EOD). EOD is a mechanism for achieving a structural development that stems from the informal economy. This has impacted India's economy positively through the increase in the small and medium businesses and enterprises (SMEs) because of the increasing participation of private agents in building and developing the entire economy. Hence, this study chooses India's economy as a specimen to examine the possible contribution of the selected variables as they are considered prevailing economic factors in India's economic performance. The direct motive of this study is to test and compare the impact of regulatory quality on EOD and economic growth in pursuit of sustainable economic development. While the focus is on the role of regulatory quality on EOD and economic growth, other vital and prevailing economic factors (banking efficiency, FDI and labor force participation rate) in India are introduced to the modeling of this study. India's economy is known for its policy structure that guarantees infrastructural development and EOD. It will add to the growth and sustainability literature to investigate the economy with respect to the implication of regulatory quality and EOD toward achieving sustainable economic growth; hence, the need for this study. For insightful research into the objectives, this study adopts a two‐model approach centered on economic growth and EOD. The study adopts Augmented Least Squares (RALS), newly developed RALS‐EG (Engle and Granger test), fully modified ordinary least squares (FMOLS), and autoregressive distributed lag (ARDL) techniques for effective analysis and justification of the objectives of this study. The findings from this analysis revealed the importance of regulatory quality to both economic growth and EOD for India through a positive interaction with the two targeted variables (i.e., economic growth and EOD). EOD has a positive link with economic growth; bank efficiency has a positive link with both economic growth and EOD; FDI has a positive link between economic growth and EOD. This shows that FDI, bank efficiency, and EOD policies will foster sustainable economic growth for India.

The main purpose of the present study is to examine either globalization affects economic growth or not in Pakistan. Time series data has collected from Pakistan covering the time from 1990- 2013. A time-series Autoregressive Distributed Lag (ARDL) model is used to establish the long run and the short run relationship between globalization and economic growth. Error Correction Model (ECM) is also used to check the short-run and long-run relationships among the globalization and economic growth. To determine the directional relationship, the Granger Causality test is being employed. To check the stability of the model CUSUM and CUSUMQ tests employed. The conclusions of this study showed a significantly negative association between Economic Globalization and Economic Growth. On the other hand, there is a significantly positive association between Political Globalization and Economic Growth. While the relationship between Social Globalization and Economic Growth has founded a significantly positive. However, our research paper provides simultaneous valuable information for policymakers to remove the red tape barriers and focus on one window operation.

Assessing the influence of research and development, environmental policies, and green technology on ecological footprint for achieving environmental sustainability

T his paper empirically examines the relationship among exports, foreign direct investment, current account deficit and economic growth in Pakistan during the period 1975-2016.We adopted the autoregressive distributed lag (ARDL) approach to co-integration together with ECM techniques to trace the long-run as well as the short-run relationships. The results demonstrate the existence of a positive and significant relationship among exports, foreign direct investment and economic growth both in the long-run and short-run in Pakistan. While, results depict that current account deficit is negatively and significantly correlated to economic growth in the long-run and short-run. Furthermore, the Granger causality test reports the unidirectional causality running from exports to economic growth.

This study investigates the determinants of macroeconomic stability and sustainable growth in Pakistan using an Autoregressive Distributed Lag (ARDL) bounds testing approach. Drawing on annual data spanning 1970 to 2023, the analysis explores the dynamic interactions among GDP growth, money supply, fuel imports, foreign direct investment, oil prices, and inflation. The ARDL bounds test confirms a long-run cointegrating relationship among these macroeconomic variables, indicating that they move together over time. Long-run estimates suggest that increases in money supply and fuel imports are associated with higher GDP growth. At the same time, elevated inflation and foreign direct investment significantly negatively impact economic performance. Foreign direct investment shows strong positive effects in the short term. However, inflation and lag-fueled imports have more complicated impacts on GDP growth, which are reflected as delayed negative influences. Diagnostic tests for autocorrelation and heteroskedasticity support the model's accuracy, and the mistake correction mechanism points to a rapid adjustment process with deviations from the long-run equilibrium being corrected at an annual rate surpassing 130%. These findings emphasize the need for stabilizing inflation, ideal foreign investment policies, and different energy sources to produce resilient macroeconomic stability and sustainable economic growth in Pakistan.

How energy consumption, industrial growth, urbanization, and CO2 emissions affect economic growth in Pakistan? A novel dynamic ARDL simulations approach

This aim of this research study aimed to was to find out the impact of expenditure on economic growth in Pakistan, using the time series data for the period. The period for research was from 1972 to 2013. Secondary data was acquired from World Development Index and Statistical Bureau of Pakistan. Stationarirty (e.g. invariant variance and covariance and mean) is general problem of time series data, as time series data suffer from problem of stationary i.e. invariant variance and covariance and mean therefore, Augmented Dicky Fuller Test (ADF) test was applied to transform stationary data into non-stationary. i have test the stationary of the data by Augmented Dicky Fuller Test (ADF). Johansen Cointegration and Granger Causality tests were applied to empirically investigate the relationship between given variables (expenditure and economic growth) in Pakistan. The cointegration results indicated that there is no any relationship between expenditure and national income in the long run.

This study examines the causal relationship between financial development and economic growth (i.e., the finance-growth nexus) in India from 1970 to 2020. It is motivated as understanding the relationship between financial development and economic growth is crucial for policy formulation, particularly in emerging economies like India. Assuming the potential non-linearity of India’s finance-growth nexus, we employ Autoregressive Distributed Lag (ARDL) and Vector Autoregression with Exogenous Variables (VARX) cointegration techniques. It is also investigated how key control variables—carbon emissions, globalization, and government expenditure—affect this nexus. Economic growth is measured by real per capita GDP, while financial development is proxied by two indicators: financial depth (the ratio of private credit to GDP) and financial efficiency (the ratio of private credit to total deposits), which is one invention of this study. Using both ARDL and VARX techniques, our findings reveal a bidirectional and non-linear relationship between financial development and economic growth, irrespective of the financial development proxy used. This bidirectional relationship highlights the intertwined nature of economic growth and financial development, suggesting that policies targeting either must consider the implications for the other, particularly within the current context of sustainable development and globalization.

This paper aims to investigate the impact of foreign direct investment (FDI) on stock market growth in Pakistan from 1990 to 2020. The study aims to evaluate the impact of FDI on stock market growth in both the short and long term, as well as examine the impact of economic growth on stock market growth. The study uses an Autoregressive Distributed Lag (ARDL) model to analyze the long-term impacts of FDI on the stock market and an Error Correction Model (ECM) to evaluate the short-term impact. The study reveals a substantively significant and positive influence of Foreign Direct Investment (FDI) on the growth of the stock market, observed from both a short-term and long-term perspective. Gross National Income (GNI) and Exchange Rate (ER) also have a significant bearing on stock market growth, while Interest Rate (IR) is found to have a negative impact but is statistically insignificant. The findings also confirm the impact of economic growth on stock market development, establishing a triangular relationship between FDI, Economic Growth, and Stock Market Growth. The study concludes that FDI has a significant positive impact on stock market growth in Pakistan in both the short and long term. It further suggests that macroeconomic policies should be developed and a tax-free market environment should be created to stimulate and encourage foreign direct investment for economic growth and stock market growth. The study's policy implications suggest that government officials should implement viable macroeconomic policies and create a tax-free market environment to encourage foreign direct investment for economic and stock market growth in Pakistan.

Islamic banking in Pakistan has gained recognition in last ten to eleven years. It offers many products which are different from conventional banking and the most significant constituent is zero interest. Currently, a chunk of people have motivation towards Islamic banking compared to conventional banking in view of its growth in terms of assets, investment and deposits. This growing number of Islamic banking institutes indicates an increased trend of Islamic banking in Pakistan. People’s trust on the legitimacy of Islamic mode of banking motivates different conventional banks to open Islamic windows besides full-fledged Islamic branches to cater the increasing demand of people in Pakistan. The present study investigates short run and long run relationship between Islamic finance development, its various products and economic growth in Pakistan. Using quarterly data for the period of 2006-2013, the study applied bound cointegration test and error correction models (ECMs) developed within an autoregressive distributed lag (ARDL) structure. The study found that there is a supply side relation between economic growth and Islamic banking in Pakistan. The study also found that Islamic banking industry exerts significant impact on economic growth.