What Lies Behind Fiscal Deficit: A Case of Pakistan

<p>The article aims to investigate some of the important factors contributing to the fiscal deficit in Pakistan for the period of 1976 to 2010. International trade, economic growth, total debt servicing and broad money supply are considered as foremost factors affecting fiscal deficit in Pakis...

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Main Authors: Rukhsana KALIM, Muhammad Shahid HASSAN
Format: Article
Language:English
Published: Babes-Bolyai University, Cluj-Napoca 2013-10-01
Series:Transylvanian Review of Administrative Sciences
Subjects:
Online Access:https://rtsa.ro/tras/index.php/tras/article/view/145
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author Rukhsana KALIM
Muhammad Shahid HASSAN
author_facet Rukhsana KALIM
Muhammad Shahid HASSAN
author_sort Rukhsana KALIM
collection DOAJ
description <p>The article aims to investigate some of the important factors contributing to the fiscal deficit in Pakistan for the period of 1976 to 2010. International trade, economic growth, total debt servicing and broad money supply are considered as foremost factors affecting fiscal deficit in Pakistan. The empirical findings reveal that only economic growth has an insignificant impact on fiscal deficit in the long run but has significant impact in the short run. Whereas, all other factors such as international trade, total debt servicing and broad money supply affect fiscal deficit significantly in both short run as well as in the long run. Moreover, it is found that there exists univariate Granger causality which runs from economic growth to fiscal deficit, from total debt servicing to fiscal deficit, and there exists bivariate causality between money supply and fiscal deficit in the short run. Also, in the long run all the factors Granger cause to fiscal deficit. The study has also found the existence of joint causality among fiscal deficit, trade, economic growth, total debt servicing and money supply.<strong> </strong></p>
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spelling doaj.art-b756d54fcd7549bcbdc6ccb4d80810972024-03-14T07:28:33ZengBabes-Bolyai University, Cluj-NapocaTransylvanian Review of Administrative Sciences1842-28452013-10-0194096113161What Lies Behind Fiscal Deficit: A Case of PakistanRukhsana KALIM0Muhammad Shahid HASSAN1Professor, PhD, Department of Economics, University of Management and Technology, Lahore, PakistanAssistant Professor, Department of Economics, University of Management and Technology, Lahore, Pakistan<p>The article aims to investigate some of the important factors contributing to the fiscal deficit in Pakistan for the period of 1976 to 2010. International trade, economic growth, total debt servicing and broad money supply are considered as foremost factors affecting fiscal deficit in Pakistan. The empirical findings reveal that only economic growth has an insignificant impact on fiscal deficit in the long run but has significant impact in the short run. Whereas, all other factors such as international trade, total debt servicing and broad money supply affect fiscal deficit significantly in both short run as well as in the long run. Moreover, it is found that there exists univariate Granger causality which runs from economic growth to fiscal deficit, from total debt servicing to fiscal deficit, and there exists bivariate causality between money supply and fiscal deficit in the short run. Also, in the long run all the factors Granger cause to fiscal deficit. The study has also found the existence of joint causality among fiscal deficit, trade, economic growth, total debt servicing and money supply.<strong> </strong></p>https://rtsa.ro/tras/index.php/tras/article/view/145pakistanfiscal deficiteconomic growthtotal debt servicinginternational trade broad money supply.
spellingShingle Rukhsana KALIM
Muhammad Shahid HASSAN
What Lies Behind Fiscal Deficit: A Case of Pakistan
Transylvanian Review of Administrative Sciences
pakistan
fiscal deficit
economic growth
total debt servicing
international trade broad money supply.
title What Lies Behind Fiscal Deficit: A Case of Pakistan
title_full What Lies Behind Fiscal Deficit: A Case of Pakistan
title_fullStr What Lies Behind Fiscal Deficit: A Case of Pakistan
title_full_unstemmed What Lies Behind Fiscal Deficit: A Case of Pakistan
title_short What Lies Behind Fiscal Deficit: A Case of Pakistan
title_sort what lies behind fiscal deficit a case of pakistan
topic pakistan
fiscal deficit
economic growth
total debt servicing
international trade broad money supply.
url https://rtsa.ro/tras/index.php/tras/article/view/145
work_keys_str_mv AT rukhsanakalim whatliesbehindfiscaldeficitacaseofpakistan
AT muhammadshahidhassan whatliesbehindfiscaldeficitacaseofpakistan