Abstract
This purpose of this research is check the long run as well as short run impact of Financial Development and Stock traded on the economic growth in the scenario of Pakistan. The time series data has taken for the year 1988-2013. This paper utilized ARDL methodology to determine long-term impact of Financial Development and Stock Traded on Economic growth. Further Granger Causality Check has used to check a uni-directional relationship. The results of this test support that FD and stock traded has a uni-directional impact over economic growth. Further, it has depicted from ARDL that there is a positive relationship between FD and Economic Growth as well as Stock Traded and Economic Growth.
Highlights
Consistent with considering of the recent growth theorists, a well groomed economic sector eases high though viable increase
This paper worked on auto regression distributed lag (ARDL) technique in order to check the long run as well as short run relationship among variables
Granger causality test is employed and the results showed that there is a uni-directional relationship among variables so FD impacts on Gross Domestic Product (GDP) and so is Stock Traded
Summary
Consistent with considering of the recent growth theorists, a well groomed economic sector eases high though viable increase. The connection between development as well as finance has been arguments in economic and financial literature. The contributions of (Mckinnon and Shaw, 1973) with respect to the connections among financial improvement as well as Economical growth, is a significant problem of discussion in developing Economic systems. This paper investigates the connection between the financial development, stock traded and Economical growth for the time period of 1988-2013 in Pakistan. Pakistan Bureau of Statistics reviews financial development (GDP). (Khan, et al 2005) has examined an empirical connection concerning financial improvement as well as growth rate pertaining to the period of 1971-2004 in Pakistan. This research study is illustrating the work on all these three variable Financial Development, Stock Traded and Economic Growth. The results are mention and at the last step the conclusion is drawn with some suggestions and policies
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