Variation in General Price Level in Pakistan: A Recent Evidence by Using ARDL Approach (1974-2016)

Sadam Hussain

International Journal of Management, Accounting and Economics, 2020, vol. 7, issue 3, 149-166

Abstract: The main purpose of this study to investigate the impact of the bank rate, budget deficit, FDI and money supply M2 on inflation in the case of Pakistan applying the ARDL model using yearly data from 1974-2016. The Experimental evidence highlight that there is a unique and stable relationship among dependent variable inflation and other different explanatory variables, bank rate, budget deficit, Foreign investment, GDP, Exchange rate and trade openness. After analysis, the result of ARDL indicates that bank rate, exchange rate, and GDP have a negative impact on inflation in the long-run co-efficient. On the other hand, budget deficit, FDI, Money supply M2 and trade openness have a positive impact on inflation. These two tests CUSUM and CUSUMSQ shed light on validates and stability of coefficients in this approach.

Keywords: Inflation; Bank rate; Foreign Investment; Budget deficit; M2; GDP; Exchange rate; Trade openness; ARDL (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.ijmae.com/article_115006_14d316da5590a0821cbac3662d25cf4c.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:air:journl:v:7:y:2020:i:3:p:149

DOI: 10.5281/zenodo.17218224

Access Statistics for this article

More articles in International Journal of Management, Accounting and Economics from International Journal of Management, Accounting and Economics
Bibliographic data for series maintained by Dr. Behzad Hassannezhad Kashani ().