Impact of domestic financial liberalization on economic growth in Pakistan |
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Authors: | Samina Naveed Zafar Mahmood |
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Institution: | 1. School of Social Sciences &2. Humanities (S3H), National University of Science and Technology (NUST), Islamabad, Pakistan |
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Abstract: | This paper attempts to investigate the domestic components of the financial liberalization process in Pakistan and develops an index of domestic financial liberalization capturing the important dimensions of reform process. Employing the multivariate co-integration technique and error-correction mechanism, the results indicate a positive impact of the index on economic growth in the long run, while its short run impact is found to be negative. Empirical findings highlight the importance of further financial deepening and financial intermediation, in a conducive environment, that are essential components to successfully implement reforms for growth stimulation. |
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Keywords: | domestic financial liberalization economic growth multivariate co integration vector error correction model (VECM) Pakistan |
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