Long-Run Relationship between Poverty and Macroeconomic Variables in Pakistan
Actual Problems of Economics, Vol. 2, No. 2, 2012
7 Pages Posted: 16 Aug 2012
Date Written: August 16, 2012
This study examines the long-run relationship between poverty and economic indicators in Pakistan. Data from 1972 to 2010 were used to analyze the relationship between various economic variables and poverty. The economic indicators include consumer price index, literacy rate and population growth. Head count rate was used to measure poverty. The statistical techniques used include unit root Augmented Dickey-Fuller test (for checking the stationary data) & Johansen's cointegration test for the long-run relationship. The study found the correlation between all the economic factors and poverty, which means that the economic performance indicators are pertinent predictors of poverty. This can help in developing poverty alleviation strategies.
Keywords: economic indicators, causality, literacy rate, population growth, Johansen's cointegration
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