Effect of inflation on the growth and development of the Pakistan economy: An empirical analysis
High and sustained economic growth with low inflation is the central objective of the macroeconomic policy makers. Therefore, inflation has been one of the most researched topics in macroeconomics for the last many years because it has serious implications for GDP growth and performance. The main ai...
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
General Association of Economists from Romania
2023-06-01
|
| Series: | Theoretical and Applied Economics |
| Subjects: | |
| Online Access: |
http://store.ectap.ro/articole/1673.pdf
|
| _version_ | 1797794123642568704 |
|---|---|
| author | Tom JACOB Raphael RINCY V.S. AJINA |
| author_facet | Tom JACOB Raphael RINCY V.S. AJINA |
| author_sort | Tom JACOB |
| collection | DOAJ |
| description | High and sustained economic growth with low inflation is the central objective of the
macroeconomic policy makers. Therefore, inflation has been one of the most researched topics in
macroeconomics for the last many years because it has serious implications for GDP growth and
performance. The main aim of this empirical study to examined the relationship between inflation
and Gross Domestic Product performance in Pakistan by using time series data from 2000 to 2022.
The major purpose of this study is to examine the existence of inflation- growth relationship in the
economy of Pakistan and to analyse the impact of inflation on GDP growth of the economy.
Augmented Dickey Fuller Unit Root Test is employed to check the unit root of the time series and
Auto Regressive Distributive Lag (ARDL) technique is used to estimate the long run and short run
impact of inflation in the economic growth of Pakistan. The present study uses Inflation as an
independent variable and Gross Domestic Product is the dependent variable. The ultimate purpose
of the study is find out long-term and short term relationships between these variables and
investigate the effect of Inflation over Pakistan economic growth.
A negative and significant inflation growth relationship has been found to be existed in the economy
of Pakistan. The results of the study show that prevailing inflation is harmful to the GDP growth of
the economy after a certain threshold level. On the basis of the descriptive and econometric analysis,
this research study suggest to the policy makers and the State Bank of Pakistan to restrict the
inflation in minimum level and to keep it stable. So that it may exert its positive effects on economic
growth of the economy. Pakistan must need inflation but in single digit of inflation stimulate the
economic growth. |
| first_indexed | 2024-03-13T02:58:15Z |
| format | Article |
| id | doaj.art-09feb186de554689bf371b073fbea56c |
| institution | Directory Open Access Journal |
| issn | 1841-8678 1844-0029 |
| language | English |
| last_indexed | 2024-03-13T02:58:15Z |
| publishDate | 2023-06-01 |
| publisher | General Association of Economists from Romania |
| record_format | Article |
| series | Theoretical and Applied Economics |
| spelling | doaj.art-09feb186de554689bf371b073fbea56c2023-06-27T21:08:25ZengGeneral Association of Economists from RomaniaTheoretical and Applied Economics1841-86781844-00292023-06-01XXX223925018418678Effect of inflation on the growth and development of the Pakistan economy: An empirical analysisTom JACOB0Raphael RINCY1V.S. AJINA2 Christ College, Irinjalakuda, Kerala, India Sri Ramakrishna Engineering College, Coimbatore, Tamil Nadu, India Christ College, Irinjalakuda, Kerala, India High and sustained economic growth with low inflation is the central objective of the macroeconomic policy makers. Therefore, inflation has been one of the most researched topics in macroeconomics for the last many years because it has serious implications for GDP growth and performance. The main aim of this empirical study to examined the relationship between inflation and Gross Domestic Product performance in Pakistan by using time series data from 2000 to 2022. The major purpose of this study is to examine the existence of inflation- growth relationship in the economy of Pakistan and to analyse the impact of inflation on GDP growth of the economy. Augmented Dickey Fuller Unit Root Test is employed to check the unit root of the time series and Auto Regressive Distributive Lag (ARDL) technique is used to estimate the long run and short run impact of inflation in the economic growth of Pakistan. The present study uses Inflation as an independent variable and Gross Domestic Product is the dependent variable. The ultimate purpose of the study is find out long-term and short term relationships between these variables and investigate the effect of Inflation over Pakistan economic growth. A negative and significant inflation growth relationship has been found to be existed in the economy of Pakistan. The results of the study show that prevailing inflation is harmful to the GDP growth of the economy after a certain threshold level. On the basis of the descriptive and econometric analysis, this research study suggest to the policy makers and the State Bank of Pakistan to restrict the inflation in minimum level and to keep it stable. So that it may exert its positive effects on economic growth of the economy. Pakistan must need inflation but in single digit of inflation stimulate the economic growth. http://store.ectap.ro/articole/1673.pdf cpigdpaicardl |
| spellingShingle | Tom JACOB Raphael RINCY V.S. AJINA Effect of inflation on the growth and development of the Pakistan economy: An empirical analysis Theoretical and Applied Economics cpi gdp aic ardl |
| title | Effect of inflation on the growth and development of the Pakistan economy: An empirical analysis |
| title_full | Effect of inflation on the growth and development of the Pakistan economy: An empirical analysis |
| title_fullStr | Effect of inflation on the growth and development of the Pakistan economy: An empirical analysis |
| title_full_unstemmed | Effect of inflation on the growth and development of the Pakistan economy: An empirical analysis |
| title_short | Effect of inflation on the growth and development of the Pakistan economy: An empirical analysis |
| title_sort | effect of inflation on the growth and development of the pakistan economy an empirical analysis |
| topic | cpi gdp aic ardl |
| url |
http://store.ectap.ro/articole/1673.pdf
|
| work_keys_str_mv | AT tomjacob effectofinflationonthegrowthanddevelopmentofthepakistaneconomyanempiricalanalysis AT raphaelrincy effectofinflationonthegrowthanddevelopmentofthepakistaneconomyanempiricalanalysis AT vsajina effectofinflationonthegrowthanddevelopmentofthepakistaneconomyanempiricalanalysis |