ARTICLE

IMPACT OF GLOBALIZATION ON INFLATION IN SELECTED SOUTH ASIAN COUNTRIES USING PANEL DATA TECHNIQUES

  1. HOME
  2. ARTICLE

32 Pages : 245-253

http://dx.doi.org/10.31703/gssr.2019(IV-II).32      10.31703/gssr.2019(IV-II).32      Published : Jun 2

Impact of Globalization on Inflation in Selected South Asian Countries: Using Panel Data Techniques

Abstract

    The present study is about to elucidate the relationship between globalization and inflation in the South Asian Region. This study is carried out for period of 1081-2016 for four south Asian countries. Panel data techniques were put into investigation. Panel unit root tests reported that the variables are of I(0) and I(1). Hausman test revealed that Pooled Mean Group is suitable for estimation i.e. ARDL. Results showed that the globalization forces considerably and significantly determine inflation. In case of individual country it affected inflation a little different; it is highly significant in case of Bangladesh and Sri-Lanka and less effective for India and Pakistan. Bangladesh and SriLanka may get benefit from protectionist policy to control inflation. We can conclude that large countries are less affected i.e. India and Pakistan. Due to large size of the country external forces are inefficient to affect domestic structure considerably. A small country is expected to be affected more, therefore, it is recommended that small countries should adopt the policies of globalization more carefully.

    Globalization, Inflation, South Asian Countries, Panel Ardl

    (1) Sher Ali
    Assistant Professor, Department of Economics, Islamia College Peshawar (Public Sector University), KP, Pakistan.
    (2) Abid Ali
    Lecturer, Department of Economics, Islamia College Peshawar, KP, Pakistan.
    (3) Saleem Khan
    Assistant Professor, Department of Economics,Abdul Wali Kahn University Mardan, KP, Pakistan.
Fulltext PDF

References

  • Afzal, M. (2007). The Impact of Globalization on Economic Growth of Pakistan. The Pakistan Development Review, 46 (4), 723-734.
  • Afzal, M., Malik, M. E., Butt, A. R., & Fatima, K. (2013). Openness, inflation and growth relationships in Pakistan: An application of ARDL bounds testing approach. Pakistan Economic and Social Review, 51(1), 13-53.
  • Ali, S. (2013). An Analysis of the Impact of Globalization on Macroeconomic Performance in Pakistan. (Doctoral dissertation, Gomal University, DI Khan Pakistan).
  • Ali, S., Wahid, F. & Ali, Abid. (2019). Globalization And Macroeconomic-Instability: Analysis For Selected South Asian Countires Using Panel Data Techniques. Journal of the Research Society of Pakistan, 5 6 (1), 147- 168.
  • Ali, S. S., Tahir, S., & Arif, G. M. (1999). Dynamics of growth, poverty, and inequality in Pakistan [with Comments]. The Pakistan Development Review,38(4), 837-858.
  • Ali, S., Shah, M. & Ali, S (2015) Globalization and Macroeconomic Stability in Pakistan (1980-2010). Global Advanced Research Journal of Management and Business Studies, 4(9) 363-372
  • Ali, S., Zaman, K. U., & Shah, M. (2013). The Impact of Globalization on Unemployment (The case study of Pakistan 1980-2010). International Journal of Physical and Social Sciences, 3(4), 148.
  • Ali, S., Zaman, K., & Shah, M. (2013). The Impact of Economic Globalization on Macroeconomic Performance in Pakistan (1980-2010). International Journal of Marketing and Technology, 3(4), 25-37.
  • Anwar, T., (2005). Recent macroeconomic developments and implications for poverty and employment in Pakistan. In Economic Growth, Economic Performance and Welfare in South Asia (pp. 76-101). Palgrave Macmillan, London.
  • Barro, R. J., & Sala-i-Martin, X. (1995). Economic growth, 1995. McGraw Hill, New York.
  • Din, M. U., Ghani, E., & Siddique, O. (2003). Openness and economic growth in Pakistan. The Pakistan Development Review, 24(4), 795-807.
  • Dritsakis, N. (2011). Demand for money in Hungary: an ARDL approach. Review of Economics and Finance, (5).
  • Engle, R.F., and C.W.J. Granger (1987), Co-integration and Error Correction: Representation, Estimation, and Testing, Econometrica, 55, 251-276
  • Falki, N. (2009). Impact of foreign direct investment on economic growth in Pakistan. International Review of Business Research Papers, 5(5), 110-120.
  • Im, Kyung So; M. Hashem Pesaran & Yongcheol Shin, 2003. ‘Testing for Unit Roots in Heterogeneous Panels', Journal of Econometrics 115(1): 53-74.
  • Iqbal, M. S., Shaikh, F. M., & Shar, A. H. (2010). Causality relationship between foreign direct investment, trade and economic growth in Pakistan. Asian Social Science, 6(9), 82-91.
  • Iqbal, Z., & Sattar, A. (2005). The Contribution of Workers' remittances to Economic Growth in Bangladesh (No. 187). Research Report.
  • Kose, M. A., Prasad, E. S., & Terrones, M. E. (2005). Growth and Volatility in an Era of Globalization. IMF staff papers, 52(1), 31-63.
  • Johansen, S. (1995), Likelihood-based Inference in Cointegrated Vector Autoregressive Models, Oxford: Oxford University Press.
  • Kao, C. (1999), Spurious Regression and Residual-based Tests for Cointegration in Panel Data, Journal of Econometrics, 90, 1-44.
  • Kao, C. and M.-H. Chiang (2000), On the Estimation and Inference of a Cointegrated Regression in Panel Data, in: Baltagi B. (ed.), Nonstationary Panels, Panel Cointegration, and Dynamic Panels, Advances in Econometrics, Vol. 15, Amsterdam: JAI Press, 161-178.
  • Khan, A., & Ahmad, A. (January 2018). Organized Crimes and Governance Gap in the Conflict Affected NorthWestern Pakistan Pakistan Journal of Criminology, 10(1), 84-98.
  • Khan, A., Ahmad, A., & Dadda, A. A. (2017). Pak-US Relations: Understanding of the Misunderstandings. Global Social Science Review, 2(2), 1-23.
  • Levin, Andrew & Chien-Fu Lin, 1992. 'Unit Root Tests in Panel Data: Asymptotic and Finitesample Properties', University of California at San Diego, Economics Working Paper Series 92-23.
  • Levin, Andrew; Chien-Fu Lin & Chia-Shang James Chu, 2002. 'Unit Root Tests in Panel Data: Asymptotic and Finite-Sample Properties', Journal of Econometrics 108(1): 1-24.
  • Khan, A.E. and Gill, R.A. (2010),
  • Lucas, R. E. (1988). On the mechanics of economic development. Journal of monetary economics, 22(1), 3-42.
  • Munir, S. & Kiani, A. (2011). Relationship between Trade Openness and Inflation: Empirical evidences from Pakistan. Pakistan Development Review, 50(4), 1-62.
  • Onwuka, E. C., & Eguavoen, A. (2007). Globalization and Economic Development: The Nigerian Experience. Journal of Social Sciences, 14(1), 45-51.
  • Pedroni, P. (1995), Panel Cointegration: Asymptotic and Finite Sample Properties of Pooled Time Series Test with an Application to the PPP Hypothesis, Indiana University Working Papers in Economics, No. 95- 013.
  • Pedroni, P. (1999), Critical Values for Cointegration Tests in Heterogeneous Panels with Multiple Regressors, Oxford Bulletin of Economics and Statistics, 61, 653-670.
  • Im, K. S., & Pesaran, M. H. (2003). On the panel unit root tests using nonlinear instrumental variables
  • Rama, M. (2003). Globalization and the labor market. The World Bank Research Observer, 18(2), 159-186.
  • Ratha, D. (2005). Workers' remittances: an important and stable source of external development finance. Remittances: development impact and future prospects, 19-51.
  • Ray, S. (2012). Globalization and economic growth in India: A Granger causality approach. Journal of Law, Policy and Globalization, 2.
  • Romer, D. (1993). Openness and inflation: theory and evidence. The Quarterly Journal of Economics, 108(4), 869- 903.
  • Tung, Le T, P.T.M. Ly and P.T.Q. Nhu (2015). The impact of remittance inflows on inflation: Evidence in Asian and the Pacific Developing Countries. Journal of Applied Economic Sciences 10(7):1076-1079.

Cite this article

APA

    APA : Ali, S., Ali, A., & Khan, S. (2019). Impact of Globalization on Inflation in Selected South Asian Countries: Using Panel Data Techniques. Global Social Sciences Review, IV(II), 245-253. https://doi.org/10.31703/gssr.2019(IV-II).32

CHICAGO

    CHICAGO : Ali, Sher, Abid Ali, and Saleem Khan. 2019. "Impact of Globalization on Inflation in Selected South Asian Countries: Using Panel Data Techniques." Global Social Sciences Review, IV (II): 245-253 doi: 10.31703/gssr.2019(IV-II).32

HARVARD

    HARVARD : ALI, S., ALI, A. & KHAN, S. 2019. Impact of Globalization on Inflation in Selected South Asian Countries: Using Panel Data Techniques. Global Social Sciences Review, IV, 245-253.

MHRA

    MHRA : Ali, Sher, Abid Ali, and Saleem Khan. 2019. "Impact of Globalization on Inflation in Selected South Asian Countries: Using Panel Data Techniques." Global Social Sciences Review, IV: 245-253

MLA

    MLA : Ali, Sher, Abid Ali, and Saleem Khan. "Impact of Globalization on Inflation in Selected South Asian Countries: Using Panel Data Techniques." Global Social Sciences Review, IV.II (2019): 245-253 Print.

OXFORD

    OXFORD : Ali, Sher, Ali, Abid, and Khan, Saleem (2019), "Impact of Globalization on Inflation in Selected South Asian Countries: Using Panel Data Techniques", Global Social Sciences Review, IV (II), 245-253

TURABIAN

    TURABIAN : Ali, Sher, Abid Ali, and Saleem Khan. "Impact of Globalization on Inflation in Selected South Asian Countries: Using Panel Data Techniques." Global Social Sciences Review IV, no. II (2019): 245-253. https://doi.org/10.31703/gssr.2019(IV-II).32