Constructive Role of Idle Cash in Pakistan: An Empirical Analysis
Journal Title: Pakistan Journal of Economic Studies - Year 2022, Vol 5, Issue 2
Abstract
Idle cash is a short-run phenomenon that turns into active cash and enhances the pace of economic growth. People for short period keep away a part of their cash from the running flow of transaction and injects it into transactions or speculative stream in long run. Low-interest rate discourages savers to earn money so people prefer to keep their money at home. Savers wait to make a positive investment in the long run. In this paper dual estimation techniques i.e., Frequentist and Bayesian are applied over the time period of 1995-2018 in the case of Pakistan. Findings show that households’ idle cash has a positive impact on the economic growth of Pakistan. On the basis of findings, it can be recommended that a safe investment environment should be provided to households as it will not only enhance the growth of Pakistan’s economy but also tackle other problems like unemployment and poverty.
Authors and Affiliations
Isma Ishtiaq, Mehr u Nisa Ishtiaq
Keywords
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