Logo
Munich Personal RePEc Archive

Does financial instability weaken the finance-growth nexus? A case for Pakistan

Shahbaz, Muhammad and Malik, Muhammad Nasir (2011): Does financial instability weaken the finance-growth nexus? A case for Pakistan.

[thumbnail of MPRA_paper_28562.pdf]
Preview
PDF
MPRA_paper_28562.pdf

Download (160kB) | Preview

Abstract

The paper investigates whether financial instability weakens finance-growth nexus in case of Pakistan. In doing so ARDL bounds testing approach is used for cointegration among variables over the period of 1971-2005. The results show that financial instability does weaken finance-growth nexus. Trade openness increases economic growth through spillover effects. Increasing inflation retards economic growth i.e., lower inflation rates are necessary for sustained economic growth. Political instability impedes economic growth. The present study indicates new direction for policy makers to sustain the pace of economic growth and avoid financial crisis.

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.