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Factors Affecting Economic Growth: A Comparative Analysis of Democratic and Non-Democratic Eras of Pakistan

Faridoon Khan, Amena Urooj () and Farman Ullah Khan
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Amena Urooj: Pakistan Institute of Development Economics, Islamabad
Farman Ullah Khan: COMSATS Institute of Information Technology, Islamabad

iRASD Journal of Economics, 2020, vol. 2, issue 2, 61-71

Abstract: This paper empirically investigated the impact of macroeconomic factors on economic growth during Pakistan's democratic and non-democratic eras. The study employed an ARDL Bounds testing approach along with an error correction model using yearly data spanning from 1971 to 2018. The empirical analysis concluded that export, remittances, and real effective exchange rate are indeed important. Export, remittances inflow, and real effective exchange rate positively influenced economic growth in the long term. Furthermore, imports negatively affect economic growth, but the affect is insignificant. The study reported an insignificant difference in the independent variables that affected the growth process and revealed that non-democratic eras' performance has not remained better than democratic government in Pakistan's case. The study recommends that policymakers pursue appropriate strategies to enhance exports and foreign remittances and appreciate a country's currency to attain long-term economic growth.

Keywords: Economic growth; ARDL; Imports; Exports; Remittances; Real effective exchange rate (search for similar items in EconPapers)
JEL-codes: C22 D72 O47 P16 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.52131/joe.2020.0101.0017

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