Trade Liberalization, Financial Sector Reforms and Growth

Muhammad Khan and Abdul Qayyum

MPRA Paper from University Library of Munich, Germany

Abstract: This paper empirically investigates the impact of trade and financial liberalization on economic growth in Pakistan using annual observations over the period 1961-2005. The analysis is based on the bound testing approach of cointegration advanced by Pesaran et al (2001). The empirical findings suggest that both trade and financial policies play an important role in enhancing growth in Pakistan in the long-run. However, the short-run response of real deposit rate and trade policy variable is very low, suggesting further acceleration of reform process. The feedback coefficient suggests a very slow rate of adjustment towards long-run equilibrium. The estimated short-run dynamics are stable as indicated by CUSUMQ test.

Keywords: Financial Sector Reforms; Trade Liberalization; Growth; Pakistan (search for similar items in EconPapers)
JEL-codes: G28 O53 (search for similar items in EconPapers)
Date: 2006, Revised 2006
New Economics Papers: this item is included in nep-cwa and nep-int
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Citations: View citations in EconPapers (8)

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Journal Article: Trade Liberalisation, Financial Sector Reforms, and Growth (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:2655

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