Estimating Long-run Trade Elasticity in Pakistan: A Co-integration Approach
Journal Title: European Online Journal of Natural and Social Sciences - Year 2017, Vol 6, Issue 2
Abstract
The analysis of this study is to monitor the effect of currency depreciation on trade elasticity, using co integration technique of ARDL. The Robust ARDL structure has been used to format the bound testing approach to co-integration model and error correction model. The bound test holds that there exists a long term stable relationship between BOP and its determining factors. The real GDP makes the balance of payment positive, both in long and short run. The study is based upon time series data (1974-2014). For estimation purpose, Johansen –Cointegration technique has been used and integration order has been applied for each variable before applying co-integration technique. This research actually seeks to examine the trade growth factors from period (1974-2014). The ARDL (autoregressive distributed lag model) examines the long run elasticity of trade. The shown technique has been collaborated through ADF test. All of the variables are incorporated at first difference i.e. I(1) accept one variable, which is GDP.ADF (augmented dickey- fuller) unit root test has been applied to examine the stationary time series data. Equation has been constructed for terms of trade and other independent variables to examine their long- run relation. ARDL shows that there is co-integration between trade growth and other independent variables i.e. GDP, CPI, NEER, NEER, IMP, EXP and also with the dependent variable TOT. Clearly, it can be noticed that the long- run relationship exists between these variables. It could be observed that “Marshal-Lerner condition” is true for Pakistan as well as for other underdeveloped countries.
Authors and Affiliations
Hina Ali, Subata Zafar
Keywords
Related Articles
- EP ID EP329491
- DOI -
- Views 102
- Downloads 0
Social Impediments of Self Employment and Sustainable Development
This paper has the objectives to explain the socio-economic culture of self-employment that are prevailing in our society creating hindrances for entrepreneurship and sustainable development. No country becomes developed...
An Evaluation of the Maladaptive Schemas and Personality Traits among Drugs Dependents
This study aimed at investigating the relationship between maladaptive schemas and personality characteristics of substance abusers. For this purpose, 120 married substance abusers were purposefully selected. According t...
Written Corrective Feedback in Second Language Writing: Does SEMI-Feedback Suffice?
Despite the multitude of studies on the effectiveness of written corrective feedback (WCF) in helping learners improve their grammatical accuracy, SLA research has scarcely explored whether there is a reliable alternativ...
Investigating the Factors Influencing RFID Adoption Intentions of Retailers: Evidences from Lahore-Pakistan
Although there have been many articles emphasizing the common remunerations of the RFID implementation in the supply chain but the progression of instigating the equipment for the administration tenacity is somewhat on...
Checking the Plentitude of (BLA-SHV) ß-lactamase Gene in Separated E. Colis in Children under 6 Years-Old Infected with Urinary Tract Infection Referring to Tehran Central Pathobiology Laboratory (2014)
Increasing consumption of Antibiotics like β-lactam antibiotics including Penicillins and Cephalosporins has resulted in the creation of refractory E. coli levels to these antibiotics. The aim of this study is investigat...