The nexus of financial deepening, economic growth, and poverty: The case of Pakistan

Authors

Abdur Rehman Aleemi, Institute of Business Administration, Karachi
Muhammad Azam, Iqra University, Karachi

Abstract

This study investigates the nexus of financial development, economic growth, and poverty for Pakistan over a prolonged period of time, 1960- 2012. Autoregressive Distributed Lag (ARDL)-Bounds testing approach to co integration and Unrestricted Error Correction Model (UECM)along with VECM Granger causality have been applied to examine the long-run dynamic relationship among financial development, economic development and poverty. For that purpose, we have developed two models and adopted a new and relatively strong proxy for financial development. The results suggest that financial development negatively affects both long-run and short-run economic growth. However, financial development is found to be positively affecting per capita consumption in the long run.

Keywords

Financial development, Economic growth, Poverty, Democracy, Dictatorship, ARDL- bounds testing, VECM granger causality

DOI

https://doi.org/10.54784/1990-6587.1355

Journal of Economic Literature Subject Codes

E52, H11, I30, O40

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Recommended Citation

Aleemi, A. R., & Azam, M. (2015). The nexus of financial deepening, economic growth, and poverty: The case of Pakistan. Business Review, 10(2), 83-99. Retrieved from https://doi.org/10.54784/1990-6587.1355