Sunday, 25 November 2012

Some new Lessons learnt based on Empirical Findings at the 28th PSDE

In the first paper causal link among growth, private investment and public investment is checked. One of the most interesting result came out of the study is that public investment crowds out private investment which is contrary to the previous studies which shows crowding in hypothesis, i.e., public investment crowds in private investment. After this paper government should stay away from investing in all those sector where there is a chance for private sector to invest. 

In two another papers on external debt and growth, both the studies came out with negative long run association between growth and external debt. They found the existence of debt overhand due to which external debt hinders growth. 

An interesting find in one of the papers (Ali and Mustafa (2012)) is that labour is negatively associated with the GDP in the long run, which to me is a absurd results. I think it is due to the problem of endogeneity since labour is taken as exogenous variable but it is an endogenous variables and should be treated endogenously. Another paper (Qayyum and Haider(2012)) treated it endogenously since they estimated the model with system GMM and came up with positive coefficient of labour. 

In the same session last paper did a critique on the FRDL-2005. the paper concluded "FRDL was implemented to improve overall fiscal discipline int eh country so as to put the country on the desire path of economic growth. The FRDL was not frame on the basis of overall economic situation of the country rather it was framed on the basis of constitutional provision. The jurisdiction of FRDL is only the federal government and provincial governments are not in the jurisdiction". Qasim and Khalid (2012).

1. Public-Private Investment and Economic Growth in Pakistan: An Empirical Analysis
Maryam Bint-e-Ajaz and Nazima Ellahi
Kashmir Institute of Economics, University of AJ&K, Muzaffarabad and Foundation University, Islamabad
2. External Debt Accumulation and its Impact on Economic Growth in Pakistan
Rifaqat Ali and Usman Mustafa
Department of Education, Attock and Pakistan Institute of Development Economics (PIDE), Islamabad
3. Foreign Aid, External Debt and Economic Growth Nexus in Low Income Countries: Empirical Evidence from Pakistan
Unbreen Qayyum and Adnan Haider
Pakistan Institute of Development Economics (PIDE), Islamabad and State Bank of Pakistan, Karachi
4. Fiscal Responsibility: A Critical Analysis of FRDL (2005) Pakistan
Muhammad Ali Qasim and Mahmood Khalid
Pakistan Institute of Development Economics (PIDE), Islamabad.

Friday, 16 November 2012