Long run analysis of trade openness on economic growth for Pakistan; Evidence from standard and optimal time series tests
Fahad Israr and
Miguel Rocha de Sousa ()
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Fahad Israr: Department of Economics, Universidade de Évora, Portugal
CEFAGE-UE Working Papers from University of Evora, CEFAGE-UE (Portugal)
This study examines the long run effect of trade openness on economic growth for Pakistan using annual data for the period 1972-2016. The long run model is estimated using several standard and optimal single equation estimates. The standard long run elasticities provide significant positive long run effects of trade openness on economic growth. The autoregressive distributive lag model optimal estimate by accommodating structural break in the series validate the cointegration among variables providing weak or no support for the long run effect of trade openness on economic growth. The estimate of the model using generalized method of moments technique and its rolling window estimation overwhelms the evidence of weak or no support by providing significantly positive long run effects of trade openness on economic growth. The results appear to support the new growth theories for Pakistan in which increasing openness helps domestic economy to grow.
Keywords: Trade openness; Economic growth; ARDL; Structural breaks; GMM (search for similar items in EconPapers)
JEL-codes: F43 O11 O53 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:cfe:wpcefa:2018_01
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