Estimating the Long-Run Creditworthiness of Pakistan

Rimsha Karim Hashmi and Abdul Qayyum

MPRA Paper from University Library of Munich, Germany

Abstract: The paper analyses the long-run creditworthiness of Pakistan. The analysis is conducted on time series data of the years 1972-2013. Two Probit Models are estimated by Maximum Likelihood Method. Three specifications of Probit Model of long-run creditworthiness of Pakistan are estimated. These alternative specifications are due to measurement of expected net capital inflows/GDP ratio. It is found that with the inclusion of lagged net capital inflows/GDP ratio in the first Probit Model, the DS/GDP ratio and INV/GDP ratio are found to be significantly impacting the long-run creditworthiness of Pakistan. In the second Probit Model, when POP/GDP ratio is included as an alternate to INV/GDP ratio, the two alternative specifications for expected net capital inflows/GDP ratio mainly the current values of net capital inflows/GDP ratio and the lagged values of net capital inflows/GDP ratio, DS/GDP ratio and POP/GDP ratio all significantly impact the long-run creditworthiness of Pakistan.

Keywords: Long-run Creditworthiness; Pakistan; Probit Model; Maximum Likelihood Method (MLM). (search for similar items in EconPapers)
JEL-codes: C32 E0 (search for similar items in EconPapers)
Date: 2016, Revised 2017
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Published in Research Journal Social Science 2.6(2017): pp. 75-87

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Related works:
Working Paper: Estimating the Long-Run Creditworthiness of Pakistan (2016)
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