SCOPE OF STUDY
Present study will attempt to investigate how the changes in the monetary policy effect, through inflation, the economic growth of Pakistan. Inflation is the most researched topic in the modern era because it has very serious implications for growth and income distribution. In case of Pakistan the excess money supply is the main factor responsible for inflation. The topic here clearly emphasizes the monetary policy have a direct link with inflation whether this policy is tight or loose because it had to effect in one way or another. Other monetary phenomenon also impact the overall growth there fore this paper will also determine whether, and how, GDP in Pakistan would respond to a change in money supply (M2), the inflation rate and interest rate & import and export in economy. REVIEW OF LITERATURE
Matthew McCartney (September 2011) “Pakistan, Growth, Dependency, and Crisis” In this paper there is an ongoing debate about the impact of trade, foreign direct investment (FDI), and financial liberalization on economic growth. Its proponents favor a positive link, having been more vocal in recent decades than during the years of import substitution and self-sufficiency in the 1950s and 1960s. Pakistan showed far more resilience to the global financial crisis than did many other developed and developing countries by maintaining positive GDP growth throughout. In 2008/09, GDP growth was negative in the world as a whole.
Arshia Amiri & Ulf-G Gerdtham (2012) “GRANGER CAUSALITY BETWEEN EXPORTS, IMPORTS AND GDP IN FRANCE: EVIDANCE FROM USING GEOSTATISTICAL MODELS”
This paper introduces a new way of investigating linear and nonlinear Granger causality between exports, imports and economic growth in France over the period 1961_2006 with using geostatistical models (kiriging and Inverse distance weighting). There has been much interest in applying endogenous growth theory to economic policy. An important example is international trade policy. Indeed, this is an area where the new research has been used in practice and has influenced public debate.
Muhammad Farooq Arby (September 2001) “Long-run trend, Business Cycle & Short-run shocks in real GDP”
The scope of this paper is limited to decompose the real GDP statistically and to project it into future. However, the results of the study raises a number of unanswered questions and pave way for future research in this area which may include use of alternate methods of decomposition, co-integration between trend and cycles exist in GDP, consumption, investment, M2, etc, and of course a detailed explanation of shocks, cycles and trends with respect to structural, political, social, and global events.
Malik Aziz-ur-Rehman Atif (February 27-28, 2013) “Impacts of Imports, Exports and Foreign Direct Investment on the Gross Domestic Product (GDP) Growth” GDP as discussed here before is the way economists calculate how much an economy is producing in total goods and services. It is usually, calculated by adding together several categories of spending, including consumer spending, investment and government spending. Exports of goods and services generate income at home, and so they are a component of GDP Imports, on the other hand, generate income abroad, so they are subtracted from the other categories of spending to get a more complete picture of how much an economy is actually producing. Higher exports and lower imports add to GDP while reduced exports and higher imports contract GDP.
Faisal Jamil & EatzazAhmad (2010) “The relationship between electricity consumption, electricity prices and GDP in Pakistan” In this study, we have profoundly investigated the inter- relationship between electricity consumption, its price and economic growth in a multivariate cointegrated system. The empirical analysis is carried out using the data for aggregate series as well as four major categories namely: residential, commercial, agricultural and manufacturing for the period...
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