Public Spending and Macroeconomic Performance in Pakistan: An Empirical Analysis
DOI:
https://doi.org/10.26710/reads.v2i2.128Keywords:
Public Spending, Economic Growth, ARDL, ECM, PakistanAbstract
Public spending management is the base of stable macroeconomic
environment .This empirical study has explored the relation between
public spending and economic performance, in the context of Pakistan.
An attempt is made to examine the growth effects of public spending for
the economy of Pakistan. To observe the public spending and Pakistan’s
macroeconomic performance, time series data has been used for the
period of 1972-2012. GDP growth has taken as the dependent variable.
By applying the Auto regressive Distributive Lag (ARDL) technology
macroeconomics performance of Pakistan has been analyzed. Our results
indicate that government expenditure has positive and significant effects
but excessive government expenditure have negative effects on the
economy’s performance. This study may suggest that provision of more
incentives to the main sectors of the economy will lead to the sound
economic conditions.
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