Economic Growth Estimation: Case Study Of Pakistan
Author: Liaqat Qazi

The determination of the determinants of economic growth is remarkably significant. In Pakistan, many researchers presented their economic growth models, but all models have some bias due to missing relevant variables. All models are not imposing prior zero restriction on other models. This situation creates a confusion that which model is good or close to good. This study explores the determinants of economic growth by using all relevant variables in a single model to overcome this missing variable bias. The data used is used for the period of 1980 to 2015 of real GDP, current expenditure, development expenditure, education, energy consumption, external debt, exchange rate, exports, health, imports, foreign direct investment, physical capital and reserves. The ARDL cointegration procedure is employed to identify the long-run and short-run relationships between economic growth and its determinants. We conclude that most of the variables have long-run relationship with economic growth. Education, exports, FDI, reserves and physical capital have a positive and statistically significant impact on economic growth in the long-run. However, current expenditure, health (life expectancy) and imports have a negative and statistically significant impact on economic growth in the long-run. Current expenditure, exports, exchange rate, health, imports, FDI, and reserves are significant in the short-run. Moreover, the model is free from the problems of heteroscedasticity and serial correlation. The model is stable for policy analysis and results have important policy implications Supervisor:- Dr. Saud Ahmed Khan

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Supervisor: Saud Ahmed Khan

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