Inflation, Income Inequality and Economic Growth in Pakistan: A Cointegration Analysis

Authors

  • Sharafat Ali Bahauddin Zakariya University Bahadur Campus Layyah

Keywords:

Inequality, Development, Manufacturing Value Added, Investment, Time Series, Unit Root, Error Correction, Pakistan

Abstract

The study is an attempt to explore the impact of inflation and income inequality in Pakistan. The study also analyzes the effect of foreign direct investment, workers’ remittances and manufacturing value added on growth. Annual time series data from 1972 to 2007 was used for the analysis. After finding all of the time series stationary at first difference, Johansen cointegration approach and vector error correction models are applied for the long run and short run analysis, respectively. The cointegration test results confirmed growth increasing impact of income inequality in Pakistan. Foreign direct investment, remittances and manufacturing valued added are found to have positives and significant impact on growth in Pakistan. The study also suggests some policy implications

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Published

2014-01-01

How to Cite

Ali, S. (2014). Inflation, Income Inequality and Economic Growth in Pakistan: A Cointegration Analysis. International Journal of Economic Practices and Theories, 4(1), 33-42. Retrieved from http://ijept.eu/index.php/ijept/article/view/Inflation_Income_Inequality_and_Economic_Growth_in_Pakistan_A_

Issue

Vol. 4 No. 1 (2014)

Section

Articles

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