Title
The Macroeconomic Analysis of Foreign Capital Inflows in Pakistan: A ReExamination Using Vector Error Correction Approach,Used
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Product Description Master's Thesis from the year 2008 in the subject Economics Macroeconomics, general, grade: A, GC University (Department of Economics), course: M. Phil Economics, language: English, abstract: The topic of Foreign Capital Inflows (FCI) to Pakistan got much attention in empirical literature, but the existing literature on FCI about Pakistan mostly used the customary econometric tools like OLS, 2SLS, FIML and 3SLS for analysis. However, we know that most of the macroeconomic variables are nonstationary, which mandates the reexamination of the past studies using new timeseries tools like cointegartion and ECM. Thus, the present book reexamines the macroeconomic role of Foreign Capital Inflows (FCI) in Pakistan through applying vector error correction model (VECM) on annual timeseries data for the period of 19722006. The present study does not find any evidence for direct positive impact of aggregate FCI on GDP growth and Investment (capital formation). However, the study finds the positive (complementary) relationship between FCI and domestic saving, thus suggesting an indirect positive impact of FCI on GDP through supplementing domestic resources. These results seem contradicting i.e. positive relation with domestic savings but negative linkages with investment and growth. However, we can interpret it as that FCI is supplementing the domestic resources and there is a need and justification for FCI in Pakistan due the shortage of domestic savings. But, these inflows of foreign capital are not transforming in the productive investment and thus not boosting economic growth. As this study shows that most of FCI are of noninvestment (non FDI) type and are concentrated in the selected nonexportoriented and lessemploymentgenerating sectors. In addition, the present study finds that exchange rate depreciation and current account deficit causes more inflows of foreign capital in Pakistan. While FCI also results in increasing the import of goods and services in P About the Author Ghulam Moheyuddin (Urdu: ???? ??? ?????; (April 22, 1979 alive), M. Phil, Economics) [also spelt as Ghulam Moheyuddin, Ghulam Mohiuddin, Ghulam Mohyuddin, Ghulam Mohiuddin & Ghulam Mohyuddin ] is a Pakistani Economist.[1] He is an Economics researcher and analyst from Pakistan. Mr. Ghulam Moheyuddin was born on April 22, 1979 AD in Haroonabad, a Small town of Pakistani Punjab.[1][2] He has done M. Phil in Economics from GC University, Lahore and presently working on his PhD Economics thesis. Detailed Biography on http: //en.wikipedia.org/wiki/Ghulam_Moheyuddin
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