An Empirical "Dependent Economy" Model for Pakistan
Nadeem Ul Haque
Pakistan Institute of Development Economics
International Monetary Fund (IMF) - Research Department
Peter J. Montiel
Williams College - Department of Economics
IMF Working Paper No. 91/102
While the "dependent economy" approach has been used extensively in theoretical work on developing countries, there is very little empirical analysis of it available in the literature. This paper specifies a dependent economy model which incorporates several developing-country features, including an explicit role for public investment and legal interest rate ceilings. The model is estimated for Pakistan and is used to analyze the country`s recent high growth-low inflation experience. In particular, the contribution that external inflows, in the form of workers` remittances and concessional lending, may have made in generating this outcome is assessed.
Number of Pages in PDF File: 32
JEL Classification: C51, E62, E35, O11
Date posted: February 15, 2006
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