Determinants of GDP Fluctuations in Selected South Asian Countries: A Macro-Panel Study
Ghulam Mohey-ud-din () and
Muhammad Wasif Siddiqi
Additional contact information
Muhammad Wasif Siddiqi: Senior Visiting Professor, Department of Economics, GC University, Lahore
The Pakistan Development Review, 2016, vol. 55, issue 4, 483-497
Now a days, the issue of volatility in GDP is becoming a fundamental development concern due to the undeniable connections between volatility and lack of development. In addition, the recognition of the negative link between short-term fluctuations and long-term growth not only signifies the importance of exploring this link but also stresses the importance of studying the determinants of the GDP fluctuations so that the efforts to manage these fluctuations can be made. Therefore, keeping in view, the importance of studying the factor causing fluctuations in GDP, the present study aims at exploring the determinants of GDP fluctuations using macro panel approach in a panel of five selected South Asian countries (SSAC) including Bangladesh, India, Nepal, Pakistan and Sri Lanka over the period of 1980-2010. For this purpose, modern non-stationary panel techniques such as cross section dependence test, second generation unit root test under cross sectional dependence, panel cointegration and Group Mean Fully Modified OLS (GM-FMOLS) estimation are applied. The results of the group mean FMOLS estimates show that aid dependence (AIDGDP), trade openness (OPEN), volatility in the price level (PRIVOL), reliance on agriculture (AGRGDP) and political stability (POLSTB) are the significant determinants of the GDP fluctuations. Thus, it is suggested that these determinants may be managed to reduce the volatility in GDP growth rate.
Keywords: Determinants of GDP Fluctuations; Determinants of GDP Volatility; South Asia; Group Mean FMOLS; Panel Cointegration; Macro Panel; Business Cycle Fluctuations (search for similar items in EconPapers)
JEL-codes: E32 F44 N15 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:pid:journl:v:55:y:2016:i:4:p:483-497
Access Statistics for this article
More articles in The Pakistan Development Review from Pakistan Institute of Development Economics Contact information at EDIRC.
Bibliographic data for series maintained by Khurram Iqbal ().