An Empirical Investigation between Money Supply Government Expenditure, Output & Prices: The Pakistan Evidence

European Journal of Economics, Finance and Administrative Sciences, Issue 17, 2009

9 Pages Posted: 20 Oct 2012

See all articles by Sulaiman D. Muhammad

Sulaiman D. Muhammad

Federal Urdu University of Arts Science & Technology

Syed Khurram Arslan Wasti

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

Adnan Hussain

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

Multiple version iconThere are 2 versions of this paper

Date Written: 2009

Abstract

The main purpose of this paper is to find out long run relationship among M2, inflation, government expenditure impact and economic growth in case of Pakistan. For this purpose we have used Johnson co integration test to find out long run association and Granger causality test to find out bilateral and unilateral causality. We have selected annual data from 1977 to 2007. Our finding shows that public expenditure and inflation are negatively related to economic growth in long run while M2 is positively impacts on economic growth in long run. The reason behind the negative association among public expenditure, inflation and economic growth is the most of public expenditure is non development and inflation is due to adverse supply shock (cost push inflation) in case of Pakistan.

Suggested Citation

Muhammad, Sulaiman D. and Wasti, Syed Khurram Arslan and Lal, Irfan and Hussain, Adnan, An Empirical Investigation between Money Supply Government Expenditure, Output & Prices: The Pakistan Evidence (2009). European Journal of Economics, Finance and Administrative Sciences, Issue 17, 2009, Available at SSRN: https://ssrn.com/abstract=2164277

Sulaiman D. Muhammad (Contact Author)

Federal Urdu University of Arts Science & Technology ( email )

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

Syed Khurram Arslan Wasti

University of Karachi - Applied Economics Research Center ( email )

University Road
Karachi, SC Sind 75270
Pakistan

Irfan Lal

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

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

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