THE TESTING OF HALL’S PERMANENT INCOME HYPOTHESIS: A CASE STUDY OF PAKISTAN

Journal Title: Asian Economic and Financial Review - Year 2012, Vol 2, Issue 4

Abstract

The objective of this study is to test the Hall’s permanent income hypothesis for Pakistan using annual data from 1992 to 2010. The basic model of permanent income hypothesis (PIH) showed the validity of absolute income hypothesis (AIH) while the Campbell and Mankiw (1990) consumption model suggested that the proportion of forward looking consumers in total population is 32 percent and the remaining consumers are backward looking. Therefore in Pakistan, there is larger fluctuation in per capita income and small opportunity for consumption smoothing.

Authors and Affiliations

Khalid Khan| Lecturer, University of Agriculture, Water and Marine Sciences, (LUAWMS), Uthal, Balochistan, Manzoor H Memon Che| Economist, Social Policy and Development Centre (SPDC). Karachi

Keywords

Related Articles

FINANCIALIZATION OF HOUSEHOLD SECTOR IN TURKEY., 2000-2013

In financialization age which is last stage of capitalism, traditional banking governance have changed their role. Banking has become mainly dependent on lending individuals without regulation. Household indebtedness was...

AN INVESTIGATION INTO THE EFFICIENCY OF MONETARY AND FISCAL POLICIES IN IRAN CASE STUDY: THE 4th ECONOMIC DEVELOPMENT PLAN

This study investigates the efficiency of the quantitative targets of monetary and fiscal policies of Iranian 4th economic development plan using dynamic simulation approach. An open macro economy model was designed and...

ESTIMATE OF POVERTY LINE AND ANALYZE OF POVERTY INDICES IN IRAN (1982-2007)

The purpose of this paper is to answer this question that if poverty status regarding various indices follow similar trends during the war between Iran and Iraq and developmental plans for urban and rural areas in Iran i...

THE SUSTAINABILITY OF EXTERNAL ADJUSTMENT PROCESS IN TUNISIA: LESSONS FOR POST “ARAB SPRING” REVOLUTION POLICIES

This paper highlights one of the first attempts in the empirical studies. It shall examine the sustainability of external adjustment policy using a quantitative approach. Using intertemporel and consistency approaches of...

DOES THE BURDEN OF CORPORATE INCOME TAX BORNE BY LABOUR THROUGH REDUCED WAGE RATES OR LABOUR HOURS, RESULTING IN A LOWER COST OF LABOUR TO THE FIRM?

Shareholders ability to shift the burden of the tax to the consumer or labour depends largely on the mobility of capital. If the investor can move from the corporate sector into the non corporate sector, the laws of supp...

Download PDF file
  • EP ID EP1797
  • DOI -
  • Views 617
  • Downloads 44

How To Cite

Khalid Khan, Manzoor H Memon Che (2012). THE TESTING OF HALL’S PERMANENT INCOME HYPOTHESIS: A CASE STUDY OF PAKISTAN. Asian Economic and Financial Review, 2(4), 518-522. https://europub.co.uk/articles/-A-1797