Inflation and Growth Nexus in Pakistan: A Time Series Analysis


  • Hina Ali
  • Fatima Farooq
  • Kishwar Parveen



Gross Domestic Product, Inflation, Child Labor Force, Unemployment, Gross Fixed Capital Formation


This study is related to recognize the effect of inflation on economic growth in the case of Pakistan. Inflation is a state when the general price level moves to increase. A large number of people say that if unnecessary money pursues meager goods this state is called inflation. This analysis is comprised of data from 1981 to 2014.  Selected variables are Gross Domestic Product growth rate, Inflation, Child labor force, Unemployment, and Gross fixed capital formation.  The inflation will work only if the rising price process prevails in the country and increases in wages, devaluation of the currency, an increase in oil prices, and an increase in indirect taxes.  This finding fails to provide credibility in the direction of observation that developing countries are confronting a persistent decline in the gross domestic product due to the devaluation of the currency. ARDL technique and unit root test are used to find stationary. There is no single solution to the conflict. So, the Government should accept those measures such as monetary and non-monetary to fight it. These measures can be classified as under monetary measures, Fiscal measures and General measures. Credit rationing put to get a better gross domestic product. Policy commands that Pakistan should adopt an energetic plan for encouraging gross domestic product utilizing exceeding channels.


Aurangzeb &UlHaq, A. (2011).Impact of Investment Activities on Economic Growth of Pakistan. Business and Management Review, 2(1), 92-100.

Borensztein, E., De Gregorio, J., & Lee, J. W. (2007). How does a foreign direct investment affect economic growth?. Journal of International Economics, 45(1), 115-135

Chaudhry, I. S., Qamber, Y., &Farooq, F. (2012). Monetary Policy, Inflation, and Economic Growth in Pakistan: Exploring Co-integration and Causality Relationships. Pak. J. Commer. Soc. Sci, 6(2), 332-347.

Falki, N. (2009). Impact of foreign direct investment on economic growth in Pakistan. International Review of Business Research Papers, 5(5), 110-120.

Farid, S., Khan, A., &Warriach, A. I. W. (2012).Effects of Inflation on Standard of Living (A case study of Multan, Pakistan). Universal Journal of Management and Social Sciences, 2(12), 1-06.

Fatima, G., Ahmed, A. M., &Rehman, W. U. (2011). Fiscal Deficit and Economic Growth: An Analysis of Pakistan's Economy. International Journal of Trade, Economics, and Finance, 2(6), 501.

Hussain, S., & Malik, S. (2011). Inflation and economic growth: Evidence from Pakistan. International Journal of Economics and Finance, 3(5), 262.

Kasidi, F., &Mwakanemela, K. (2013). Impact of Inflation on Economic Growth: A case study of Tanzania. Asian Journal of Empirical Research, 3(4), 363-380.

Mallik, G., &Chowdhury, A. (2001). Inflation and economic growth: evidence from four south Asian countries. Asia-Pacific Development Journal, 8(1), 123-135.

Pradhan, R. P., Arvin, M. B., Samadhan, B., &Tanejha, S. (2013). The impact of stock market development on inflation and economic growth of 16 Asian countries: A panel var approach. Applied Econometrics and International Development, 13(1), 203-220

Saqib, D., Masnoon, M., &Rafique, N. (2013).Impact of foreign direct investment on the economic growth of Pakistan. Advances in Management & Applied Economics, 3(1), 35-45

Thayaparan, A. (2014). Impact of Inflation and Economic Growth on Unemployment in Sri Lanka: A Study of Time Series Analysis. Global Journal of Management And Business Research, 14(5)

Yabu, N., &Kessy, N. J. (2015). Appropriate Threshold Level of Inflation for Economic Growth: Evidence from the Three Founding EAC Countries.Applied Economics and Finance, 2(3), 127-144

Zakaria, M. (2010). Openness and inflation: evidence from time-series data.Do?u?ÜniversitesiDergisi, 11(2), 313-322.




How to Cite

Ali, H. ., Farooq, F. ., & Parveen, K. (2020). Inflation and Growth Nexus in Pakistan: A Time Series Analysis. Review of Applied Management and Social Sciences, 3(1), 113-129.

Most read articles by the same author(s)

1 2 > >>