Effectiveness of Government Expenditure Crowding-In or Crowding-Out: Empirical Evidence in Case of Pakistan

European Journal of Economics, Finance and Administrative Sciences, No. 16, 2009

7 Pages Posted: 30 Sep 2010

See all articles by Adnan Hussain

Adnan Hussain

Benazir Bhutto Shaheed University, Lyari, Karachi; University of Karachi - Applied Economics Research Centre

Sulaiman D. Muhammad

Federal Urdu University of Arts Science & Technology

Kamran Akram

University of Karachi - Applied Economics Research Center

Irfan Lal

Institute of Business Management (IoBM); University of Karachi - Applied Economics Research Centre; Institute of Business Management

Date Written: January 5, 2009

Abstract

The purpose of this paper is to find out the long run association between private investment and government expenditure (fiscal policy) in case of Pakistan. Our result shows that current expenditure like defence and debts serving cause crowding out private investment while development expenditure like infrastructure, health and education, cause crowding in private investment. The study used time series annual data of Pakistan economy during the period from 1975 to 2008. Johansen co integration technique is used to find out long run association between variables.

Keywords: Private investment, government expenditure, crowding in or crowding out

Suggested Citation

Hussain, Adnan and Muhammad, Sulaiman D. and Akram, Kamran and Lal, Irfan, Effectiveness of Government Expenditure Crowding-In or Crowding-Out: Empirical Evidence in Case of Pakistan (January 5, 2009). European Journal of Economics, Finance and Administrative Sciences, No. 16, 2009, Available at SSRN: https://ssrn.com/abstract=1684576

Adnan Hussain

Benazir Bhutto Shaheed University, Lyari, Karachi ( email )

Faqir Mohammad Dura Khan Road,
Near cheel chowk
Karachi, Sindh 75500
Pakistan

HOME PAGE: http://www.bbsul.edu.pk

University of Karachi - Applied Economics Research Centre ( email )

Mail University Road
Karachi University
Karachi, SC Sind 75270
Pakistan

Sulaiman D. Muhammad

Federal Urdu University of Arts Science & Technology ( email )

Sector G-7/1, Main University Road
Gulshan-e-Iqbal
Karachi, Sindh 744000
Pakistan

Kamran Akram

University of Karachi - Applied Economics Research Center ( email )

University Road
Karachi, SC Sind 75270
Pakistan

Irfan Lal (Contact Author)

Institute of Business Management (IoBM) ( email )

Plot # 84
Korangi Creek
Karachi, Sindh 75190
Pakistan

University of Karachi - Applied Economics Research Centre ( email )

Main University Road
Karachi University
Karachi, SC Sindh 75270
Pakistan
00923212348843 (Phone)

Institute of Business Management ( email )

D-93040 Regensburg
Germany

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