Abstract
This research is about determining the relationship of macroeconomic variables with different capital market indices of Pakistan. Therefore, for this purpose ARDL (Autoregressive Distributed Lagged Model) approach to co-integration has been applied to determine the long run relationship and Toda-Yamamoto causality test to determine the uni-directional relationship. It is found that the impact of different macro-economic variables is not exactly the same on different capital market indices. According to ARDL results, Money supply (M2) and GDP has positive significant, whereas discount rate has negative significant impact on KSE100 index.In case of Lahore stock exchange, none of the macroeconomic variable has significant impact on LSE25 index. According to the results of Toda-Yamamoto causality, only inflation has causal relationship with KSE100 and LSE25 index.
Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
