THE EFFECT OF PUBLIC EXPENDITURES, INFLATION RATE AND FOREIGN AID ON ECONOMIC GROWTH IN AFGHANISTAN, PAKISTAN AND IRAQ: PANEL DATA ANALYSIS

Muhammad Akbar and Elife Akiş
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Muhammad Akbar: Mawlana Jalaluddin Mohammad Balkhi University
Elife Akiş: ISTANBUL UNIVERSITY

Ekonomi Maliye Isletme Dergisi, 2024, vol. 7, issue 1, 1-17

Abstract: The main purpose of this study is to investigate the effect of public expenditures, foreign aid, and consumer inflation rate on economic growth in Afghanistan, Pakistan, and Iraq between 2001 and 2020 with panel data analysis. For this purpose, in the study, after examining the variables graphically, their logarithms were taken and then Multiple Linear Connection, Likelihood Ratio and Lagrange Multiplier tests were performed. According to the result of the Hausman test, it was determined that the random effects model was valid. After the Hausman Test, heteroskedasticity, autocorrelation and intraclass correlation tests were performed to reach the final model. According to the results of the final model, a 1% increase in public expenditures increases economic growth by 0.86% and a 1% increase in inflation rate increases economic growth by 0.12%. However, a 1% increase in received foreign aid decreases economic growth by 0.29%.

Keywords: Economic Growth; Public Expenditures; Foreign Aid; Inflation; Random Effects Model (search for similar items in EconPapers)
JEL-codes: E31 F35 H50 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:gnx:emid43:2024-7-1-1369439

DOI: 10.46737/emid.1369439

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