An Empirical "Dependent Economy" Model for Pakistan

October 1, 1991

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An Empirical "Dependent Economy" Model for Pakistan, (USA: International Monetary Fund, 1991) accessed December 26, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

While the “dependent economy” approach has been used extensively in theoretical work on developing countries, there is very little empirical analysis of it available in the literature. This paper specifies a dependent economy model which incorporates several developing-country features, including an explicit role for public investment and legal interest rate ceilings. The model is estimated for Pakistan and is used to analyze the country’s recent high growth-low inflation experience. In particular, the contribution that external inflows, in the form of workers’ remittances and concessional lending, may have made in generating this outcome is assessed.

Subject: Consumption, Foreign exchange, Government consumption, Government debt management, National accounts, Private consumption, Public financial management (PFM), Real exchange rates

Keywords: Aggregate demand, Capital stock, Consumption, Current account, Exchange rate, Goods sector, Government consumption, Government debt management, Investment equation, Middle East, Nontradable goods, Private consumption, Private sector, Real exchange rates, Supply function, Traded goods, WP

Publication Details

Pages:

32
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1991/102
Stock No:

WPIEA1021991
ISBN:

9781451852554
ISSN:

1018-5941

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