An Assessment of Sustainable Economic Growth: The Role of Poverty and Education Revisited

This study endeavors to examine the impact of foreign direct investment at aggregated as well as disaggregated level are estimated for economic growth in Pakistan. The data for the period of 1980-2017 was utilized for the analysis. Foreign direct investment at a disaggregated level, i.e. foreign direct investment in low skill-intensive sectors (FDILS), foreign direct investment in medium skill-intensive sectors (FDIMS), and foreign direct investment in high skill-intensive sectors (FDIHS) has been taken as the core variables of the study. Tota and Yamamoto were used to establishing the relationship among the variables in long and the short run. The long-run results of TY causality indicate that TFDI has a positive impact on economic growth. FDILS have a negative impact while FDIMS and FDIHS have a positive impact on the economic growth of Pakistan. The causality results with aggregate FDI explored that a unidirectional causality exists between TFDI and GDP, and the direction of causality running from GDP to TFDI. The causality results with disaggregate FDI indicate that a bidirectional causality exists between GDP, FDILS, FDIMS, and FDIHS. The study discussed some of the issues related to economic growth and FDI in Pakistan. Suggested some measures boost economic growth having specific consideration on low skill, medium skill, and high skill FDI as it has a significant contribution to economic growth. Recent research studies associations among FDI and economic growth in the context of 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

Attaining sustained economic growth is one of the key objectives of any country to improve the well-being of its people and strengthen its economic position in the world. Capital formation is one of the crucial factors of economic growth as it promotes productivity, efficiency, and higher output growth. Therefore, this paper intends to analyze the impact of natural, physical, and human capital formation on economic growth in Pakistan by employing annual time series data from 1971 to 2020. Different econometric approaches such as unit root test, bound test, and ARDL model are utilized to estimate the results. The study found that labor force participation rate, physical capital, human capital, natural capital, FDI, and financial development are positively associated with economic growth in Pakistan. Instead of FDI, all the variables are found to be significantly related to economic growth in Pakistan. Considering the study’s findings, it is concluded that capital formation is essential to progress the economy of Pakistan, so policymakers must concentrate on investing in physical infrastructure, improvement in health and educational facilities, and efficient utilization of natural resources to promote economic growth.

The objective of this study is to endorse the driving factors behind total factor productivity (TFP) and economic growth in Pakistan. Pakistan’s average growth rate is 5% for last few decades, and although this growth level is satisfactory, Pakistan faced several formidable challenges yet. The economic growth has been determined mainly through labor-intensive technology and export-oriented manufacturing activities. However, TFP is assessed from the aggregate production function using the Cobb–Douglas production function that permits for the simultaneous expansion of outputs and contraction of inputs. The annual timer series data have been extracted from 1972–2016 World development Indicator (WDI) for this study. The overall results reveal that almost all variables are statistical significant. Moreover, innovation significantly contributes to economic growth and production level in Pakistan. This analysis may have significant suggestions to policy makers in Pakistan and other emerging economies when framing sustainable growth policy.

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.

Agriculture sector works as backbone of Pakistan economy. In this modern era, exports work as locomotive of growth train. Pakistan earned a handsome amount through exports of agricultural raw material and refined products. This research investigates that either there is unidirectional or bidirectional association between agricultural exports and economic growth in Pakistan? For empirical investigation of relationships between economic growth and agricultural exports in Pakistan this study used most reliable econometric estimation tools, augmented Dickey–Fuller unit root test, Johansen co-integration and Engle–Granger causality tests for 45 time series annul observations from 1970 to 2014. This research winds up that Pakistan’s agricultural exports have positive but insignificant association with gross domestic product growth. It is due to the primary and raw material agricultural products exports which cannot compete in international markets due to close competitions, lower quality and dearer price. Consequently, receive a trifling amount as exports earnings; contribute slightly in national economic growth.

This study investigates the relationship between democracy and economic growth in Pakistan by using the annual time series data from the period 1972 to 2013. The ARDL bound testing cointegration approach, Johansen and Juselius cointegration approach and Gregory and Hansen structural break cointegration approach confirm the valid long-run relationship between democracy and economic growth. Results suggested that democracy, labour force and gross fixed capital formation have positive and significant impact on economic growth in both long run and short run. Results of generalised forecast error variance decomposition method under vector autoregressive (VAR) system suggested unidirectional causal relationship between democracy and economic growth in Pakistan. The present study may guide policymakers in formulating conclusive monetary and fiscal policies to increase economic growth in Pakistan and also get sustainable economic growth for long span of time.

The literature on the macroeconomic effects of remittances is inconclusive. This study establishes a relationship between remittances and other important macroeconomic variables, such as consumption, investment and economic growth in Bangladesh, Egypt, Pakistan, and Syria over the period 1975-2006. Overall results suggest that remittances have a positive impact on economic growth in Pakistan and Syria but a negative impact in Bangladesh and Egypt. Negative remittance-growth coefficients in those two countries suggest a counter-cyclical relationship. A key objective of this paper is to identify how the remittance behavior of migrants varies across countries. Results from panel estimation procedure shows that a combination of self-interest and enlightened self-interest behavior of migrants is responsible for the growth impact in Bangladesh. The enlightened self-interest motivation is also the most likely cause of the growth impact in Egypt. Finally, the self-interest behavior explains the growth impacts in Pakistan and Syria. Results from this paper have policy implications for developing countries which face dilemmas and debates on the impact of remittances on economic growth.

Monetary and fiscal policy are both macroeconomic instruments used to govern and have a large impact on a country's economy, businesses, production and consumption. The objective of the study is to evaluate the comparative analysis of fiscal and monetary policy in Pakistan. For this purpose, an autoregressive distributed lag (ARDL) model was used, which showed the significant impact of monetary and fiscal policy on enhancing economic growth. Data was obtained from World Development Indicator (WDI) from 1990 to 2020. In this study, two models have been estimated using the Gross Domestic Product (GDP) as a dependent variable and Development Expenditures, Gross Fixed Capital Formation, Labor Force Participation, Corruption, Total Tax, Trade openness, Broad Money (M2), Governmental Consumption Expenditure as independent variables. The results showed that monetary policy positively impacts Pakistan’s economy. Also, the study found that fiscal policy affects Pakistan’s economy positively. But the study reveals that monetary policy is more powerful in promoting economic growth in Pakistan. So, we will suggest that promoting the monetary policy in the banking sector would provide a suitable investment atmosphere through the maintenance of inflationary rates, interest rates, and lending rates to endorse and confirm economic growth, sustainability, solidity, and progress in Pakistan.

The research investigates the causality relationship between FDI, Trade Economic growth in Pakistan. Using quarterly time series data from 1998 to 2009, this paper examines the causality relationship between foreign direct investment, international trade and economic growth in Pakistan. In VAR model, the integration and Cointergration analysis suggested that there is a long run relationship among the factors. The results of VECM causality test find bidirectional causality between foreign direct investment, export and economic growth, with are two important factors that enhance the affect of economic growth in Pakistan. Foreign Direct Investment has positive impact on the trade growth in Pakistan. It was revealed that government should play a positive role in proving security to the investors around the globe. It was further revealed that FDI should invest in various parts of Baluchistan as well as rural part of Sindh province.

This study examines the impact of income inequality and economic growth on environmental degradation in Pakistan using ARDL bounds testing approach for the period 1966–2011. Empirical results for the aggregate CO2 emissions and its four sources such as CO2 emissions from solid fuel, liquid fuel and gaseous fuel consumption as well as electricity and heat production confirm the existence of long run co-integrated relationship between income inequality, economic growth and environment degradation. The estimated results indicate that carbon emissions increase as the income gap expands in Pakistan. Besides the negative impact of industrial share and population density on CO2 emissions, we also confirm that economic growth in Pakistan comes up with higher emissions. Hence, the hypothesis of EKC is not valid for Pakistan during the study period. Our empirical findings are robust as evidenced by dynamic ordinary least squared and the U-tests. Overall, this study suggests that the distribution of income matters to aggregate carbon emissions and focus should be made on sustained economic growth to reduce pollutants and hence CO2 emission in the study area.

Electricity is a versatile form of energy that plays a vital role in fulfilling the daily requirements of human life. The primary aim of this study was to investigate and explore the link between economic growth, electricity access, energy use, and population growth in Pakistan for the period 1990–2016. An autoregressive distributed lag (ARDL) bounds testing approach to cointegration was applied to investigate the causality link between the study variables. These tests shed light on the long-run connection among the variables; further, the results revealed that the electricity access to the total population, electricity access to the urban population, energy usage, population growth, and urban population growth had a significant impact on economic growth, while the electricity access to the rural population and rural population growth had a negative impact on the economic growth in Pakistan. According to these findings, this study recommends that the government of Pakistan pay further attention to increasing its electricity production from different sources, including hydroelectric, solar, oil, and gas, and nuclear in order to fulfill the country’s demands.

To examine the asymmetric effects of militarization on economic growth and environmental degradation, this empirical research analyzes annual data of Pakistan and India over the period 1985-2018 using the NARDL econometric model. The empirical results show significant positive militarization effects on economic growth, while non-militarization also shows positive effects on the economic growth in Pakistan and India. Estimation showed that a 1% increase in militarization (non-militarization) led to 8.818% (3.849%) increase in GDP growth, whereas a 1% increase in militarization (non-militarization) decreased carbon emissions by - 1.034% (- 0.225%) in the long run in Pakistan, while militarization has also decreased the carbon emissions - 0.337% in India in the long run. The relationship between militarization and economic growth has an asymmetry in Pakistan and India in the short and long run, while asymmetry also exists between militarization and CO2 in Pakistan and India in the short and long run. Our findings offer significant policy implications for promoting economic growth and environmental quality in Pakistan and India.

This paper examines the relationship between deagriculturalization, economic growth, and CO2 emissions in Pakistan from the period 1975 to 2018 by employing a nonlinear autoregressive distributed lag (NARDL) model and Granger causality approach. The asymmetric ARDL findings show that there is a significant negative relationship between agriculturalization and economic growth, while deagriculturalization does not induce economic growth in the long run in Pakistan. Moreover, agriculturalization and deagriculturalization have a negative significant effect on Pakistan’s carbon emissions in the long run. This study concludes that the asymmetric results deviate from symmetric results in Pakistan. The asymmetric causality test shows unidirectional asymmetric causality running from agriculturalization, deagriculturalization, and CO2 emissions. Moreover, agriculturalization and deagriculturalization do not Granger cause economic growth in Pakistan. Based on the results, the study stressed to formulate such policies which support economic growth and lower carbon emissions through reforming agriculture sector practices. These outcomes are very useful for Pakistan to formulate relevant policies.

An analysis of a causal relationship between economic growth and terrorism in Pakistan