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EXCHANGE RATE MONETARY POLICY AND BALANCE OF TRADE AN EMPIRICAL INVESTIGATION OF PAKISTAN

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35 Pages : 348-354

http://dx.doi.org/10.31703/gssr.2022(VII-II).35      10.31703/gssr.2022(VII-II).35      Published : Jun 2

Exchange Rate, Monetary Policy and Balance of Trade: An Empirical Investigation of Pakistan

Abstract

    The current study investigates the real influence of the rate of exchange in real terms, GDP in real terms, money supply and infrastructure on the balance of trade in Pakistan by employing Johnson co-integration and ECM. The real GDP and infrastructure positively affected mini missing the gap of trade deficit to improve the trade performance of the economy of Pakistan.In contrast, the factor of effective exchange rate and money supply negatively affected on trade deficit of the country. The rate of R-Square is 0.85, it tells that 85 percent variation in the balance of trade is captured by independent variables.The important recommendation of this research is that the exchange rate should be stable and consistent with the equilibrium path. The negative ECM value of -40 obviously pointed out that there is a 40 percent convergence of the total said parameters in mini missing the gap of trade deficit for the economy of Pakistan.

    Trade Balance, Exchange Rate, Annual Data

    (1) Allah Bux Lakhan
    Lecturer, Government Degree College Ghotki, Sindh, Pakistan.
    (2) Zulfiqar Ali Keeryo
    Economic Growth Advisor, Research and Training Wing, Planning and Development Department, Government of Sindh, Karachi, Sindh, Pakista
    (3) Jazib Mumtaz
    PhD Scholar, Department of Social Sciences Economics, Shaheed Zulfikar Ali Bhutto Institute of Science and Technology, Karachi, Sindh, Pakistan.
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Cite this article

APA

    APA : Lakhan, A. B., Keeryo, Z. A., & Mumtaz, J. (2022). Exchange Rate, Monetary Policy and Balance of Trade: An Empirical Investigation of Pakistan. Global Social Sciences Review, VII(II), 348-354. https://doi.org/10.31703/gssr.2022(VII-II).35

CHICAGO

    CHICAGO : Lakhan, Allah Bux, Zulfiqar Ali Keeryo, and Jazib Mumtaz. 2022. "Exchange Rate, Monetary Policy and Balance of Trade: An Empirical Investigation of Pakistan." Global Social Sciences Review, VII (II): 348-354 doi: 10.31703/gssr.2022(VII-II).35

HARVARD

    HARVARD : LAKHAN, A. B., KEERYO, Z. A. & MUMTAZ, J. 2022. Exchange Rate, Monetary Policy and Balance of Trade: An Empirical Investigation of Pakistan. Global Social Sciences Review, VII, 348-354.

MHRA

    MHRA : Lakhan, Allah Bux, Zulfiqar Ali Keeryo, and Jazib Mumtaz. 2022. "Exchange Rate, Monetary Policy and Balance of Trade: An Empirical Investigation of Pakistan." Global Social Sciences Review, VII: 348-354

MLA

    MLA : Lakhan, Allah Bux, Zulfiqar Ali Keeryo, and Jazib Mumtaz. "Exchange Rate, Monetary Policy and Balance of Trade: An Empirical Investigation of Pakistan." Global Social Sciences Review, VII.II (2022): 348-354 Print.

OXFORD

    OXFORD : Lakhan, Allah Bux, Keeryo, Zulfiqar Ali, and Mumtaz, Jazib (2022), "Exchange Rate, Monetary Policy and Balance of Trade: An Empirical Investigation of Pakistan", Global Social Sciences Review, VII (II), 348-354

TURABIAN

    TURABIAN : Lakhan, Allah Bux, Zulfiqar Ali Keeryo, and Jazib Mumtaz. "Exchange Rate, Monetary Policy and Balance of Trade: An Empirical Investigation of Pakistan." Global Social Sciences Review VII, no. II (2022): 348-354. https://doi.org/10.31703/gssr.2022(VII-II).35