An Empirical "Dependent Economy" Model for Pakistan

International Monetary Fund

No 1991/102, IMF Working Papers from International Monetary Fund

Abstract: While the “dependent economy” approach has been used extensively in theoretical work on developing countries, there is very little empirical analysis of it available in the literature. This paper specifies a dependent economy model which incorporates several developing-country features, including an explicit role for public investment and legal interest rate ceilings. The model is estimated for Pakistan and is used to analyze the country’s recent high growth-low inflation experience. In particular, the contribution that external inflows, in the form of workers’ remittances and concessional lending, may have made in generating this outcome is assessed.

Keywords: WP; aggregate demand; capital stock; current account; exchange rate; private sector; traded goods; goods sector; investment equation; supply function; nontradable goods; Real exchange rates; Consumption; Government consumption; Private consumption; Government debt management; Middle East (search for similar items in EconPapers)
Pages: 32
Date: 1991-10-01
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:1991/102

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