Impact of Expenditure on Economic Growth in Pakistan

Abstract

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.