All Theses and Dissertations


Master of Science in Economics

Faculty / School

Faculty of Business Administration (FBA)


Department of Economics

Date of Award

Spring 2017


Dr. Mohammad Nishat

Second Advisor

Dr. Farooq Pasha

Committee Member 1

Dr. Mohammad Nishat, Institute of Business Administration, Karachi

Committee Member 2

Dr. Farooq Pasha, Institute of Business Administration, Karachi

Project Type


Access Type

Restricted Access


ix, 54


This thesis revisits the topic of welfare cost of inflation for the case of Pakistan based on partial equilibrium analysis. However partial equilibrium analysis understate the social and private costs of inflation. Therefore, in this thesis, welfare cost associated with inflation has been estimated empirically as well as through Cash in Advance (CIA) two good model for the case of Pakistan. As the classification of monetary aggregates has been changed, annual data is taken for the period of 1960 to 2007 for the empirical analysis. Results suggest that welfare cost upsurges with the rate of inflation by using the currency in circulation, M1, and M2. When welfare cost is associated with various growth rate of money, it varies from zero to 42 percent.

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