 Trade Openness, Size of Economy and the Saving–Investment Relationship: A Dynamic Analysis for PakistanFaiza Umer and Shaista Alam South Asian Journal of Macroeconomics and Public Finance, 2015, vol. 4, issue 2, 233-257 Abstract: The main objective of this study is to examine the saving–investment relationship with the size of economy and trade openness in Pakistan during the period 1960–2011. For this purpose, the study employed vector auto-regression (VAR) to check simultaneity among trade openness, economic growth and saving–investment. Findings of the study confirm a significant positive relationship among trade openness, economic growth, saving and investment of Pakistan in the long run, but these do not establish a significant short-run relationship among trade openness, economic growth, savings and investment. In light of empirical results, the present study suggests that external sector development should be given due importance. For this purpose, the availability of credit should be enhanced properly. This will not only increase the saving rate in the country but also enhance domestic investment. JEL Classification: A11, B12, C13, D14 Keywords: Trade openness; economic growth; savings; investments; Vector Error Correction Model; impulse response function; variance decomposition (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:sae:smppub:v:4:y:2015:i:2:p:233-257 Access Statistics for this article More articles in South Asian Journal of Macroeconomics and Public Finance |
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