Monetary-Fiscal-Trade Policy and Economic Growth in Pakistan: Time Series Empirical Investigation

Authors

  • Syed Tehseen Jawaid IQRA University
  • Faisal Sultan Qadri IQRA University
  • Nasir Ali IQRA University

Abstract

This study empirically examines the effect of monetary, fiscal and trade policy on economic growth in Pakistan using annual time series data from 1981 to 2009. Money supply, government expenditure and trade openness are used as proxies of monetary, fiscal and trade policy respectively. Cointegration and error correction model indicate the existence of positive significant long run and short run relationship of monetary and fiscal policy with economic growth. Result also indicates that monetary policy is more effective than fiscal policy in Pakistan. In contrast, trade policy has insignificant effect on economic growth both in the short run and in the long run. In light of the findings, it is suggested that the policy makers should focus more on monetary policy in order to ensure economic growth in the country. It is also recommended that further research should be conducted to find out such components of exports and imports which lead to the ineffectiveness of trade policy to enhance economic growth in Pakistan.

Keywords:  Monetary; Fiscal; Trade; Economic Growth

JEL Classifications: E42; E62; F13; F43

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Author Biographies

Syed Tehseen Jawaid, IQRA University

Lecturer, Department of Business Administration.

Faisal Sultan Qadri, IQRA University

Lecturer, Department of Business Administration

Nasir Ali, IQRA University

MBA Student

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Published

2011-07-19

How to Cite

Jawaid, S. T., Qadri, F. S., & Ali, N. (2011). Monetary-Fiscal-Trade Policy and Economic Growth in Pakistan: Time Series Empirical Investigation. International Journal of Economics and Financial Issues, 1(3), 133–138. Retrieved from https://www.econjournals.com/index.php/ijefi/article/view/25

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