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What Lies Behind Fiscal Deficit: A Case of Pakistan

Transylvanian Review of Administrative Sciences

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Title What Lies Behind Fiscal Deficit: A Case of Pakistan
 
Creator KALIM, Rukhsana; Professor, PhD, Department of Economics, University of
Management and Technology, Lahore, Pakistan
HASSAN, Muhammad Shahid; Assistant Professor, Department of Economics, University of
Management and Technology, Lahore, Pakistan
 
Subject Pakistan; fiscal deficit; economic growth; total debt servicing; international trade broad money supply.
 
Description The article aims to investigate some of the important factors contributing to the fiscal deficit in Pakistan for the period of 1976 to 2010. International trade, economic growth, total debt servicing and broad money supply are considered as foremost factors affecting fiscal deficit in Pakistan. The empirical findings reveal that only economic growth has an insignificant impact on fiscal deficit in the long run but has significant impact in the short run. Whereas, all other factors such as international trade, total debt servicing and broad money supply affect fiscal deficit significantly in both short run as well as in the long run. Moreover, it is found that there exists univariate Granger causality which runs from economic growth to fiscal deficit, from total debt servicing to fiscal deficit, and there exists bivariate causality between money supply and fiscal deficit in the short run. Also, in the long run all the factors Granger cause to fiscal deficit. The study has also found the existence of joint causality among fiscal deficit, trade, economic growth, total debt servicing and money supply.
 
Publisher Babes Bolyai University
 
Contributor We are highly indebted to the University of Management and Technology which provided us the opportunity to accomplish this research paper. A preliminary draft of this paper was earlier presented in the ‘2nd International Conference on Business and Managem
 
Date 2013-10-01
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://rtsa.ro/tras/index.php/tras/article/view/145
 
Source Transylvanian Review of Administrative Sciences; 2013: Issue No. 40 E/October; 96-113
1842-2845
 
Language eng
 
Relation http://rtsa.ro/tras/index.php/tras/article/view/145/141
 
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