Term Paper On Inflation in Pakistan

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Writing a thesis is no easy task, especially when it comes to a complex topic like inflation in Pakistan.

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Inflation is a critical economic issue in Pakistan that affects the daily lives of its citizens. It is the
sustained increase in the general price level of goods and services in an economy over a period of
time. This topic requires a deep understanding of economic theories, statistical analysis, and the
current economic situation in Pakistan.

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Inflation forecasts are an important input into monetary policy formation. Foreign firms operating in
Pakistan are currently facing cash flow problems. That. The preferred VECM contains the CPI,
private sector credit, and the wheat support price. The time series data used for the time period of
1980 to 2010 which is collected from world data bank. Dynamics and Food Prices in an Agricultural
Economy in pakistan. A(L) and B(L) are lag polynomials that take the form. Lagged 1 Month 1.772
14.949 1.680 10.272 1.508 16.025 1.910 37.363. Bank of India was the central bank for both India
and Pakistan. H0 Money supply not negatively effect inflationary trend in Pakistan. Under this
category, there are a) deficit induced inflation; b) wage induced inflation; c) profit induced inflation
etc. The task of keeping the rate of inflation low and stable is usually given to monetary authorities.
Finally, monetary policy has to be forward-looking to achieve its inflation target. It simply means that
when there is an increase in aggregate demand. They are not raising the prices for no good reasons.
July through March, inflation hit 9.49 percent, up from 8 percent from the previous. For Later 88%
88% found this document useful, Mark this document as useful 13% 13% found this document not
useful, Mark this document as not useful Embed Share Print Download now Jump to Page You are
on page 1 of 14 Search inside document. We specify a simple inflation model that includes standard
monetary. The non-traditional or promotional functions, performed by the State Bank include. The
government has also allowed the import of various items through land routes. India. The losses
incurred in the transition to independence were taken from. To browse Academia.edu and the wider
internet faster and more securely, please take a few seconds to upgrade your browser. This is the
single biggest source of inflationary pressure and needs to be controlled. Marcellino, Massimiliano
(2004) Leading Indicators: What Have We learned. In G. Elliot, C. W. J. Granger. For example,
inflation can happen when governments print an excess of money to. Hyder, Zulfiqar, and Sardar
Shah (2004) Exchange Rate Pass-Through to Domestic Prices in Pakistan. (State. Private sector
credit growth and broad money growth are leading indicators of inflation (Table 6). We. The
analytical result indicated by applying Regression model method and SPSS tool on collected data
from the July 2002 to Feb 2010, suggest that in the long-run inflation is not only related to Interest
Rate but also with supply of money. Impact on Business sector: Due to high inflation rate central
bank, State Bank of Pakistan has to raise its bench mark to 14% means tight monetary policy since
last 2 years. Floods, droughts, crop pests can all raise the price of domestic goods, and often goods
that are essential to the poor. The study also analyzes the effect of foreign direct investment, workers’
remittances and manufacturing value added on growth.
During the decade of fifties, monetary policy was used to correct external balances in. Pakistan's
economy mainly encompasses textiles, chemicals, food processing, agriculture, and other industries.
The highest frequency of range that is the modal range of inflation was 3 percent to 6 percent during
the entire study period. The empirical results are broadly consistent with our stylised model. The
study has adopted the Augmented Dickey-Fuller technique for checking stationary, the ARDL
approach for checking long-run and short-run relationships, and the CUSUM and CUSUMSQ tests
for stability of the coefficients. Pakistan), Bankers Equity Limited, Pakistan Industrial Credit and
Investment. Pakistan, and are good leading indicators for future inflation. But the PPP government
is serving inflation amounting to death for the people of this country. GRAPE Stock Market Brief
Deck 214.pdf Stock Market Brief Deck 214.pdf Michael Silva Veritas Financial statement
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VictoriaGaleano Indistinguishable from Magic: How the Cybersecurity Market Reached a Trillion.
The State Bank of Pakistan frames and operates the monetary policy. Monetary. Of these, only
private sector credit growth and lags of. The model of the study works out the short-run and the
long-run impact of money growth on the rate of inflation in Pakistan. We specify a simple inflation
model that includes standard monetary. This is achieved by making use of trimming approach on
past data on monthly CPI changes to isolate a Relatively Stable Component of CPI (RSC-CPI) as a
new measure of core inflation. The overall average annual growth rate of inflation was 6.85 percent
in the period 1991-2012. The results found that there is long run as well as short run relationship
among the variables. While the study shows that the money supply works through the system in less
than a year, it also points out that the system takes rather long to converge to equilibrium if shocks
appear in any of the three variables, viz., GDP, money supply, and prices. It also maintains the
exchange value of the rupee in terms of. H1 Money supply negatively effect inflationary trend in
Pakistan. The stationarity of data is checked through the unit root test. Keywords: Inflation,
Pakistan, Leading Indicators, Forecasting, Monetary Policy. In order to formulate policies regarding
its control and keeping it at a moderate level, it is necessary to explore its major determinants. While
budgetary allocations are inadequate to meet legitimate public expectations, state authorities misuse
the allocations themselves. Similarly, ECT (-1) term was -0.04 and also significant. Bank of India
was the central bank for both India and Pakistan. Using Augmented Dickey Fuller (ADF) and
Philips-Peron (PP) unit root tests, all the variables came stationary at order one or I (1). Ordinance,
1962 and Banks Nationalization Act, 1974. Inflation is one of the major problems of this country.
M4 explains CPI inflation as a function of private sector credit growth, real GDP. Large as it seems,
it is a much less dramatic decline than witnessed by Turkey, Egypt and Morocco.
An econometric framework was used to focuses on the detection of the main. Figure 1 shows that
inflation follows broad money growth and private sector. Inflation is the trend of rising prices and
this is a disease that engulf the whole. Furthermore, rising labor costs can also lead to inflation,
because workers demand wage increases, and companies usually chose to pass on those costs to their
customers, this sort of inflation is called cost-push inflation. Pakistan, with a population of about 16
million people has undergone a remarkable. It is found that durable goods, electricity, import, natural
gas, steel mills product, capital goods export, food import and government sector borrowing has
affect on inflation in Pakistan. In such inflation local governments are helpless; it is due to an
increase in the prices of imported goods. To. Unleashing the Power of AI Tools for Enhancing
Research, International FDP on. I'd like to add that in Pakistan, as shown in one of the graphs in the
article, the currency in circulation is rising fast as compared to the GDP, and is now exceeding 15%
of GDP. I. The primary functions including issue of notes, regulation and supervision of. Balance of
Payment, Effects on Monetary Policy, Effects on Social Sector, Effects on. If there is increase in
prices it will results in fall in aggregate supply. Section III estimates the model and assesses the roles
for. No meaningful VECM that contains broad money could be identified in the sample. How AI in
the Insurance Industry is Influencing Regulatory Changes in 2024 How AI in the Insurance Industry
is Influencing Regulatory Changes in 2024 Deriv Accumulator Trading Stratagies by Vince
Stanzione Deriv Accumulator Trading Stratagies by Vince Stanzione Inflation and its Impact on
Pakistan Economy Muzafar hussain 1. Alexander Decker The Causal Analysis of the Relationship
between Inflation and Output Gap in T. The results showed a positive long run impact of personal
remittances, FDI and human capital on economic growth of Pakistan. Price Puzzle. (February).
(Bank of Greece Working Paper No. 10.). Mohsin Khan is Director of the Middle East and Central
Asia Department of the International Monetary. Pakistan, with a population of about 16 million
people has undergone a remarkable. An econometric framework was used to focuses on the detection
of the main determinants of recent inflation trends. This low level of inflation was supported by strict
fiscal discipline, the lower. Act, 1956. In order to discharge its duties efficiently and successfully
some of the. While governments cannot wish these shocks away, it can and must invest in resilience
mechanisms, as these are likely to benefit the poor most. The cash coefficient is 0.01% suggesting
that one percent expansion in cash supply prompts 1% expansion in value level and it is the most
noteworthy component of swelling in Pakistan’s economy. The cointegration test results confirmed
growth increasing impact of income inequality in Pakistan. Companies (NBFCs) (leasing companies,
Investment Banks, Discount Houses. By using the CPI, the inflation rate can be calculated. Stealth
Inflation is the term used to describe charges and fees created by business to. Apart from this,
foreign aid for socio-economic development projects often ends up in the hands or pockets of corrupt
politicians and those in authority, defying all attempts at accountability.
Inflation reduces the buying power of our money, so we become poorer, even if we have the same
amount of money in the bank or in our pocket. CPI, Private Sector Credit, and Wheat Support Price
VECM. A government protects lives, doesn’t kill its citizens. SWOT (Strengths, Weaknesses,
Opportunities, Threats). There is absolute lack of proper economic planning on part of the
government. Ali Kemal 2006, Pakistan Development Review The paper finds that an increase in
money supply over the long-run results in a higher rate of inflation and thus provides support for the
quantity theory of money. Similarly, sensitive price index (SPI) increased over 15 percent in 1981-
82, and over 12 percent in 1990-91. ARDL bound testing approach to co-integration confirms the
existence of long run relationship among the variables of poverty, economic growth, inflation,
investment and trade openness over the period of 1972-2008. In Pakistan, this erosion has been
significant: by the mid-1970s, the Pakistani rupee had lost half of the purchasing power it had in
1956; and by the early 1990s, it had lost 90pc. Foreign direct investment, remittances and
manufacturing valued added are found to have positives and significant impact on growth in
Pakistan. Right now, the Country appears stuck with the various off shoots of the crisis (such as
shrinking private inflows, weakening Rupee, lack of energy, highest unemployment rate, nose-diving
foreign reserves, ever rising commodity prices and almost hyperinflation). It also provides advice to
commercial banks and other. There is an unfortunate history of exploitation of debt among poor
people, and unscrupulous micro lenders have been allowed to run rampant in poor communities. Ali
Kemal The paper finds that an increase in money supply over the long-run results in a higher rate of
inflation and thus provides support for the quantity theory of money. By using the CPI, the inflation
rate can be calculated. This structuralist school of thought holds that supply. Download Free PDF
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The researcher has chosen data on the Pakistan economy ranging from 1972 to 2021. Monetary
Policy Decision 13 April 2012 as the economy begins the last quarter of. The portion expressed as a
percent of depositor’s balances banks must have on hand. The significance of the research study was
in throwing light on the prevailing scenario where Pakistan is faced with multiple challenges both
internally and externally. Hence, the findings imply that the Interest rate has a greater impact on the
inflation in Pakistan. Source: National authorities, IMF staff calculations. Before cointegration, it is
essential to discover the stationarity of the variables for which the augmented dickey fuller test has
been used at the f irst difference. In order to achieve the aims of this study, quarterly time series data
from the first quarter of 2001 until the fourth quarter of 2017 was utilised. You can download the
paper by clicking the button above. This is to draw the attention of authorities towards. A
considerable amount of bribery, nepotism and the use of political office for personal enrichment
remained highest throughout the current PPP regime. Pakistan), Bankers Equity Limited, Pakistan
Industrial Credit and Investment. This paper draws on previous work by Khan and
Schimmelpfennig, “Inflation in Pakistan.
The inflation if it crosses the double digit is an index of a weak economy. The. Report this
Document Download now Save Save Inflation in Pakistan, its causes and its remedies. The
researcher has chosen data on the Pakistan economy ranging from 1972 to 2021. The unit root ADF
and philliperron shows that economic growth is stationary on level as well as 1 st difference but
unemployment and inflation are stationary on 1 st difference. Inflation is a key indicator of a country
and provides important view on the state of the economy and the policies of the government. There
are many causes for inflation, depending on a number of factors. Annual inflation targets can vary
depending on where inflation stands at the beginning. Financial deepening also occurred as
confidence returned in the. M3. In an open economy, headline inflation can also be affected by
movements of the exchange rate (e).6. Empirical Analysis of Fiscal Dominance and the Conduct of
Monetary Policy in. Inflation is classified on the basis of the process through which it is induced. Out
of a number of variables affecting economic growth, few have been taken into our model e.g.
Foreign Direct Investment (FDI), Domestic Savings, Employed Labour Force, Capital Formation,
Human Capital Index and Balance of Trade. Download Free PDF View PDF Effect of Inflation and
Unemployment on Economic Growth in Pakistan Farah Naz Download Free PDF View PDF
Pakistan Journal of Humanities and Social Sciences Nexus between Inflation, Unemployment, and
Economic Growth of Pakistan Habib Asghar This research study is about the impact of two major
economic vices namely inflation and unemployment on the economic growth in Pakistan. Bank of
Pakistan Working Papers No. 5.) Available via the Internet at. For regressions based on growth rates,
we control for seasonality by. A large section of the state bank's duties were widened when the State
Bank of. For non-stationary time series, Equation (1) only reflects short-run relationships as the
variables are in. Non-contrived convenient random sampling Method was used in survey to collect
data from State Bank of Pakistan, National Bank of Pakistan and Statistical and planning division of
Pakistan. The amendments also increased the autonomy and accountability of the chief. Hence, the
findings imply that the Interest rate has a greater impact on the inflation in Pakistan. Food prices,
administered prices, wages, and import prices are considered. Note that this model may be mis-
specified if we have non-stationary data and there exists a cointegrating vector. It is well admitted
fact that mild inflation is natural and a greasing factor to the wheel of economy and commerce and
on the other hand, high inflation causes negative impact on economy. Outcomes of this study
disclose that there is strong, indirect and significant association found between UR and IR. January
2012 and still April rate of inflation rising 25.33 percent recorded high. Thirdly, most of the
industries are closed due to government. On consumers, escalating food prices in the face of inflation
lower the purchasing power of the Rupee, fanning a higher cost of living and ruthlessly lowering the
quality of life. The bank rate is the rate of interest at which the SBP discounts the first class bills of.
ARDL technique is used, depending upon the time series properties of data that confer mixed order
of integration. In our case, we include 12 lags of all variables in the general model.
Pakistan’s inflation rate has grown more than expectations with increase in fuel and food prices.
Monetary Policy Decision 13 April 2012 as the economy begins the last quarter of. Ordinance, 1962
and Banks Nationalization Act, 1974. Author’s Note: The views expressed in this paper are those of
the authors and do not necessarily represent those of the. Due to the increasing level of
unemployment the purchasing power of common man has significantly shrunk. Non-contrived
convenient random sampling Method was used in survey to collect data from State Bank of Pakistan,
National Bank of Pakistan and Statistical and planning division of Pakistan. The results showed a
positive long run impact of personal remittances, FDI and human capital on economic growth of
Pakistan. In our case, we include 12 lags of all variables in the general model. The traditional
functions may be classified into two groups. Fund. Axel Schimmelpfennig is an Economist in the
International Monetary Fund’s Middle East and. Satisfactory law and order situation is critical to
attract investment in Pakistan. The. Comparative Longitudinal Analysis on Global Inflation with a
special emphasis. With monetary growth picking up, inflation followed. Mean Absolute Percentage
Error 5.662 4.300 5.834 18.941. Pakistan), Bankers Equity Limited, Pakistan Industrial Credit and
Investment. However, using the LSM instead of real GDP does not alter the result. During the
decade of fifties, monetary policy was used to correct external balances in. Study the measures that
have been taken by the government to control inflation. State Bank of Pakistan ( Pakistan’s Central
Bank) to change management in banks. This method ensures inclusion of both food and non-food
commodities that show persistent price behavior in Pakistan. Pakistan's terms of trade, expressed in
an index set at 100 in FY 1981, were 78.0 in. Their government has crushed unarmed people in cold
blood. High inflation has pushed the food purchase bills up and common man is hardly affected in
this era of highly increasing prices. Between 1992 and 1997, inflation increased on average to 11.
Analysts say the government wanted to continue with the old. Download Free PDF View PDF See
Full PDF Download PDF Loading Preview Sorry, preview is currently unavailable. Dysfunctional
government institutions continue to paralyze the country and its people. Over the years, it has been
clearly accepted that one of the contributions of inflation targeting has been its. Download Free PDF
View PDF Inflation Rates in Pakistan Aftab Alam Comparison between Civilian government and
Military Administrations Economic Policy Analysis. Download Free PDF View PDF An
Investigation of Nature and Causes of Inflation in Pakistan Ehsan Shaikh In this study, we
investigate the nature and causes of inflation in Pakistan.

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