THE EFFECT OF TRADE OPENNESS ON INFLATION IN PAKISTAN

Fiaz Sulehri and Javaria Khan
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Javaria Khan: Lahore School of Accountancy and Finance, University of Lahore

Bulletin of Business and Economics (BBE), 2020, vol. 9, issue 3, 135-140

Abstract: This study empirically verifies the existence of significant relationship between inflation and trade openness for Pakistan using annual time-series data for the period of 1980 to 2014. The basic objective of this study is to examine the Romer’s hypothesis for Pakistan with real agriculture value added, real exchange rate, real gross domestic product, money & quasi money and used trade openness, import openness and export openness ratios separately as explanatory variables with inflation rate as dependent variables. For this purpose, we have used ARDL technique the expected empirical findings show that there is no long-run relationship between inflation and trade openness, which rejects the existence of Romer’s hypothesis for Pakistan.

Keywords: trade openness; inflation; real exchange rate; real gross domestic product (search for similar items in EconPapers)
JEL-codes: F14 P24 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (4)

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