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Title Impact of Trade Liberation on Economics Growth of Pakistan

Author(s) Irum Shahzadi

Abstract In this study the relationship between trade liberalization and economic growth is assessed for Pakistan from the 1980 to 2016. The study estimated three equations: First, the impact of labor force growth and physical capital growth is analyzed on GDP; Second, the labor force growth is effected by trade liberalization, inflation, FDI, government expenditures and human capital; Third, physical capital is affected by the same variables which affect the labor force growth. The estimation is carried out using the Generalized Method of Moment technique (GMM). The results obtained from this study show that trade liberalization does not affect the GDP directly. It works through the channel of labor force growth and physical capital growth. The results of this study also indicate that trade liberalization positively impacted the labor force growth and the physical capital growth and in turn these two variables positively impact the economic growth of the country. The results of the study show that besides trade liberalization, foreign direct investment, human capital and government expenditures are the main contributors in economic growth. The finding recommended that government should make export oriented trade policies and should formulate FDI-led policies and direct the government expenditure to education sector to achieve the objective of higher economic growth. Key words: Gross domestic product (GDP), trade liberalization/ trade openness (TO), Government expenditure (GE), foreign direct investment (FDI), Human capital (HC), Inflation (INF). Generalized Method of Moment estimation technique (GMM).

Type Thesis/Dissertation MS

Faculty Management Sciences

Department Economics

Language English

Publication Date 2019-05-29

Subject Economics

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