A REASSESSMENT OF FINANCIAL LIBERALIZATION AND ECONOMIC GROWTH IN A DEVELOPING COUNTRY: EMPIRICAL EVIDENCE FROM CO-INTEGRATION ANALYSIS

Authors

  • Muhammad Idrees Department of Economics, University of Peshawar, Pakistan
  • Umar Hayat Department of Economics and Development Studies, University of Swat, Pakistan
  • Qurat ul Ain Department of Economics, University of Peshawar, Pakistan

DOI:

https://doi.org/10.52567/pjsr.v3i4.622

Abstract

The study examines the level of financial liberalization and its impact on economic growth of Pakistan by using the time series data set for the year 1980-2018 respectively with having secondary data in nature. Augmented Dickey Fuller (ADF) test employ to confirm the level of unit root to various macroeconomic variables. In order to check the association of long and short run the study used ARDL technique of the main model. The empirical results of ARDL showed that FLI has a positive effect on country economic growth in both short-run and long-run. To find the stability of econometric model, this study used impulse response function. The results confirmed that the policy makers should plan different strategies and financial reforms to maintain the financial sector environment in the economy more open to attain the desired level of growth. As financial restrictions negatively affect growth of the country, it is recommended that decreasing barriers to financial sector can increase the economic growth.

Keywords: Financial liberalization, Economic Growth, FLI and PCA.

Author Biography

  • Umar Hayat, Department of Economics and Development Studies, University of Swat, Pakistan

     

     

     

Additional Files

Published

2021-12-31

Issue

Vol. 3 No. 4 (2021): Pakistan Journal of Social Research (PJSR)

Section

Research Article

License

Copyright (c) 2022 Muhammad Idrees, Umar Hayat, Qurat ul Ain

Creative Commons License

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How to Cite

[1]
“A REASSESSMENT OF FINANCIAL LIBERALIZATION AND ECONOMIC GROWTH IN A DEVELOPING COUNTRY: EMPIRICAL EVIDENCE FROM CO-INTEGRATION ANALYSIS”, Pak. J, Soc. Sci., vol. 3, no. 4, pp. 733–747, Dec. 2021, doi: 10.52567/pjsr.v3i4.622.