Trade-off between Inflation, Interest and Unemployment Rate of Pakistan: Revisited

Sumera Arshad and Amjad Ali
Additional contact information
Sumera Arshad: Department of Economics, University of the Punjab, Lahore, Pakistan

Bulletin of Business and Economics (BBE), 2016, vol. 5, issue 4, 193-209

Abstract: This study analyses the interrelationship of unemployment rate, interest rate and inflation rate in Pakistan over the period from 1974 to 2013. Autoregressive Distributed Lag (ARDL) model has been employed to find co-integration among variables of the models. Vector Error-Correction model is utilized for analysing short run dynamics of the models. The results do not provide significance trade-off between unemployment rate and inflation rate. Trade off exists in interest rate analysis over short run with inflation rate and unemployment rate. The empirical results show population growth and exchange rate have negative whereas external debt plays a positive role in determining unemployment rate in Pakistan. Money supply is revealed as major cause of inflation while exchange rate and imports have contributed negatively in inflation. The rate of interest has positive impact on domestic credit to private sector whereas it is negatively related to exchange rate.

Keywords: Inflation Rate; Unemployment Rate; Interest Rate (search for similar items in EconPapers)
JEL-codes: E31 E40 J6 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (105)

Downloads: (external link)
https://bbejournal.com/index.php/BBE/article/view/260/215 (application/pdf)
https://bbejournal.com/index.php/BBE/article/view/260 (text/html)

Related works:
Working Paper: Trade-off between Inflation, Interest and Unemployment Rate of Pakistan: Revisited (2016)
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:rfh:bbejor:v:5:y:2016:i:4:p:193-209

Access Statistics for this article

Bulletin of Business and Economics (BBE) is currently edited by Dr. Muhammad Irfan Chani

More articles in Bulletin of Business and Economics (BBE) from Research Foundation for Humanity (RFH) Contact information at EDIRC.
Bibliographic data for series maintained by Dr. Muhammad Irfan Chani ().