Please use this identifier to cite or link to this item: http://hdl.handle.net/10995/111405
Title: Fiscal Deficit and Trade Deficit Nexus in Pakistan: An Econometric Inquiry
Authors: Abbas, S.
Waheed, A.
Issue Date: 2021
Publisher: Savez Ekonomista Vojvodine
National Library of Serbia
Citation: Abbas S. Fiscal Deficit and Trade Deficit Nexus in Pakistan: An Econometric Inquiry / S. Abbas, A. Waheed // Panoeconomicus. — 2021. — Vol. 68. — Iss. 5. — P. 745-763.
Abstract: This study is an attempt to explore the short-term and long-term effects of the fiscal deficit along with other macroeconomic variables on the dete-riorating trade deficit of Pakistan from 1980 to 2018 by using time series estimation techniques. The result of the autoregressive distributed lag (ARDL) bounds testing approach and error correction term revealed the existence of cointegra-tion among variables of interest. The estimated long-run and short-run results of the ARDL approach showed a significant positive effect of fiscal deficit on Paki-stan's trade deficit in the short-run, whereas a significant adverse effect is observed in the long-run. The findings validated the twin deficit hypothesis in the short-run, whereas twin divergence proposition is observed in the long-run. The study suggests prudent fiscal and monetary policies to make macroeconomic conditions favorable for the development and competitiveness of domestic production sectors engaged in the international trade. © 2021, Savez Ekonomista Vojvodine. All rights reserved.
Keywords: ARDL
FISCAL DEFICIT
GRANGER CAUSALITY
PAKISTAN
TRADE DEFICIT
URI: http://hdl.handle.net/10995/111405
Access: info:eu-repo/semantics/openAccess
SCOPUS ID: 85120505121
PURE ID: 29140206
ISSN: 1452-595X
Appears in Collections:Научные публикации, проиндексированные в SCOPUS и WoS CC

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