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No. 377

October 2014

Vol. XCV




Inflation and Economic Growth
in Pakistan
(An Econometric Approach)

Mazhar-ul-Haq Baluch*

This study has been conducted to assess the bi-directional relationship of economic growth and inflation so that beyond theoretical concept inflation could be treated for policy implication. Time Series data pertaining to 1971 to 2005 for analysis purposes was applied to estimate the objective oriented results. Both the series were found to be stationary at first difference for all the considered period on the basis of ADF test and Phillip Parron Test The estimated Error Correction Model (ECM) has shown no exact relationship in the snort as well as in the long-run. Undoubtedly the three periodical segments showed different pattern of relationship because of independency of relationship under every considered segment of time beyond theory and concept

So there existed a positive shock to the system which resulted in adjustment in opposite direction. These results were supporting to the idea that the system revealed no relationship between inflation and economic growth under the environment created by the economic, social and political policies of the country. The optimal inflation rate for Pakistan under the introduced economic environment was 8 percent or 9 percent which would be positively contributing to economic growth.

  • * Senior Research Fellow,
    Lahore School of Economics, Main Campus, Burki Road. Lahore, Pakistan.

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Growth Dynamics among South Asian
Countries: A Time Series Analysis

Saba Ismail*


This paper is an attempt to understand growth dynamics of South Asian region. This paper explores and examines the growth convergence process and income feedback effect in the region. Real per capita income of South Asian Countries has been studied using time series approach. Convergence hypothesis has been tested using both deterministic and stochastic time series framework. First approach based on concordance and discordance procedure of real per capita income convergence within South Asian countries reveals that the countries are not converging to each other. Similar results were derived by stochastic approach of convergence. The result shows that developing countries, namely India, Pakistan and Sri Lanka, and least developing countries, namely Bangladesh and Nepal, seems to be diverging rather than converging. The possible reason of differential growth path may be the different rate of capital accumulation and varying structural change in South Asian economies. Though the results are not consistent with the predictions of the Solow-Swan neo-classical model but these results validates the presence of income spillover effect in the South Asian region. The results of this paper emphasize to take up regional initiatives to reduce income gaps. In case of SAFTA and SATIS, concessions must be exchanged on the basis of economic development of different countries

  • * Assistant Professor, Department of Economics, Jamia Millia Islamia (Central University), New Delhi-110025.

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Invalid Dichotomy Once Again:
The Non-Separable AS-AD Model

Chu, Hong-Yih*
Kam, Tai-Yung**

The modern AS-AD dichotomous model suggests that when the expected price is equal to the actual one, there will be a dichotomy between aggregate demand and aggregate supply and the expected policy will -be ineffective. This paper re-examines the dichotomy by introducing the notion that the government expenditure is composed of consumption expenditure and investment expenditure into the modern AS-AD model. We are able to show that the government's policy of expanding consumption expenditures is ineffective which is consistent with the modern AS-AD model. But a government's anticipated or unanticipated investment expenditures increase will enable output to exceed the former output.

  • * Department of International Business, Asia University, No. 500, Lioufeng Rd., Wufeng.
  • ** Department of Finance, Asia University.

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Land Acquisition for Industrialisation
and Employment in
Developing Economies

Smita Nath *

This paper attempts to construct an analytical framework to examine the effects of land acquisition for industrialisation on aggregate employment and income of a developing country where the agricultural sector is supply constrained and the industrial sector is demand constrained. The results indicate that agricultural land acquisition for industrialisation does not necessarily improve the employment scenario of a country. But there is scope of making this policy effective by properly choosing the land for conversion, new industries to be set up etc. For example, the land to be converted should be less fertile, the market demand for the new industry to be constructed in the acquired land should be highly sensitive to its price, the industrial sector should be more labour-intensive etc.

  • * Associate Professor, Department of Economics, Scottish Church College, 1 & 3, Urquhart Square, Kolkata 700 006

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Impact of Land Acquisition Aggregate
A Psycho-economic Analysis

Maniklal Adhikary*
Samrat Chowdhury**

The aim of this paper is to examine the effect of land acquisitions on the inter-temporal consumption pattern of small, medium and large farmers. The study is novel in the sense it takes into account the role of psychological stress in shaping future consumption patterns, after the farmers are stripped of their land due to acquisition. The study points out the fact that the effect of land acquisitions on three different categories of farmers would be different However, broadly speaking, the aggregate consumption in an agrarian economy is likely to fall.

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Determinants of Job Satisfaction
Amongst Industrial Workers

Arfa Shafiq*
Muhammad Ramzan**

The present study is confined to know the status of job satisfaction amongst employees of some industrial units within the vicinity of Lahore Pakistan SPSS 15.0 was used to analyze the data, using correlation and multi regression analysis and independent sample t-test. t-test results show, no evidence of a systematic difference of job satisfaction between males, females; single, married, and permanent, contract employees. However it is observed from t-test that male, married and permanent employees have comparatively lower levels of job satisfaction as compared to female, single and contract employees. The regression analysis shows that income and gender are significant predictors of job satisfaction. The study can be helpful for the employers to design their human resource strategies according to the changing socio-economic environment in the country.

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Growth, Structure and Concentration
of India's Exports

Neena Malhotra**

The present paper examines the growth, structure and commodity concentration of exports of India. For this purpose, various measures of commodity concentration have been computed by taking data on exports from "Directorate General of Commercial Intelligence and Statistics (DGCIS), Government of India (various issues)" covering the period 1987-88 to 2009-10. The study has used five measures of concentration for analyzing the structure of India's exports and the changes therein during the study period. All the measures basically gives, similar results and indicate that there is no concrete evidence of decline in commodity concentration of India's export sector despite liberalization and globalization. Lack of diversification of India's export sector is primarily due to lack of diversification of Indian manufacturing sector.

If we look at the structure of India's exports in terms of major 'categories (11 categories), there is some decline in concentration, but when we use sub category wise data (43 /sub-categories) concentration has in fact increased during the study period. Among the major categories, India's exports are primarily textile and textile products, engineering goods, Chemical and related products, Agriculture and allied products. At sub category wise analysis the major commodities dominating India's export sector are Basic chemicals, pharmaceuticals and cosmetics, Ready made garments and Petroleum products. Gems and Jewellery, Cotton yarn, fabrics, madeups, etc, Marine products. Petroleum products, Leather and manufactures, Machinery and instruments.

  • * Research Scholar
  • ** Associate Professor, Punjab School of Economics, Guru Nanak Dev University, Amritsar, 143001.

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