Sulaiman D. Muhammad

Test of Okun’s Law in Some Asian Countries Co-Integration Approach

The objective of this paper is to estimate the Okun’s coefficient, and to check the validity of Okun’s law in some Asian countries, whether it is valid or not, for this purpose we have used the time series annual data during the period 1980-2006. Engle Granger (1987) co integration technique is employed to find out long run association between variables and error correction mechanism (ECM) is used for short run dynamic. After getting empirical evidences it can be said that Okun’s law interpretation may not be applicable and also the principle of NAIRU does not hold its validity in some Asian developing countries. Our results have also supported to Noble Prize awarded Austrian economist Paul Krugman.

Women empowerment and microfinance: A case study of Pakistan

The aim of this study is to highlight the role and effectiveness of microfinance in empowering women. The data used for this study were collected from Women empowerment index (WDI) and the book of Pakistani statistics. An empirical investigation was carried out by using Johansen co integration approach to evaluate the long-term correlation between poverty, growth, and microfinance and women empowerment. To analyze women empowerment, a study index was designed. The results of this study demonstrated that there is a positive and significant correlation between women empowerment and the chosen variables with respect to Pakistan.

Impact of Macroeconomics Variables on Stock Prices: Empirical Evidence in Case of KSE

The purpose behind this study is to explore the correlation among the macroeconomics variables and share prices of KSE (Karachi Stock Exchange) in context of Pakistan. The study considers several quarterly data for different macroeconomics variables are as foreign exchange reserve, foreign exchange rate, industrial production index (IPI), whole sale price index (WPI), gross fixed capital formation (GFCF) and broad money M2. These variables are obtained from the period 1986-2008. The result shows that after the reforms in 1991 the influence of foreign exchange rate and foreign exchange reserve significantly affect the stock prices, while other variables like IPI and GFCF are insignificantly affect stock prices. The result also highlighted the internal factors of firm like increase in production and capital formation insignificant while external factor like M2 and foreign exchange affect positively. The study will be very helpful for national policy makers, researchers and corporate managers.

The Impact of Oil Prices Volatility on Export Earning in Pakistan

The object of this study is to explore the correlation between the oil price variability and export earning with reference to Pakistan. The study consists of annual data for the period of 1975 to 2008. The study highlights that there are significant correlation among the export earnings and most of the macroeconomics variables such as GDP growth, standard of living, balance of trade, oil price variability and Broad money M2. To find out the long run association among the variables the Johansen co-integration approach is employed. The short run dynamics capture through VECM (vector error correction model). The finding of the VECM exhibits that there is disequilibrium which may be adjusted within half a year.

Financial Market Integration in Pakistan

This research evaluates the issue of financial integration with reference to financial market of Pakistan; subsequent to liberalization (1991) capital flows rapidly growing due to openness reforms. This openness reforms specifically increased capital flow in short run in domestic market. It is imperative to explore causes pertaining to this issue to obtain positive impact with growing sustainable financial markets. For this purpose, monthly data of Karachi interbank offer rate (KIBOR), 3 months treasury bills rate, Pakistani rupee/US dollar exchange rate, stock prices (Karachi Stock Exchange 100 index) and the London Interbank offer rate (LIBOR) were used. Applying Johnson co integration technique, it is found that there is a long run correlation among local foreign exchange market and LIBOR but this relationship is not robust due to high control of State Bank of Pakistan (SBP). Securities market is still found at the developing stage and not fully integrated with international financial market. It is suggested that further steps and initiatives be taken to increase international financial integration in securities market. This may be very helpful to reduce arbitrage and speculation in financial market in Pakistan.

Effects of Financial Structure and Financial Development on Economic Growth: A Case Study of Pakistan

The object behind this study is to explore the long run association between economic growth and financial structure in Pakistan context. For this purpose we have used the data from the period of 1975 to 2008, and applied Johansen cointegration technique to find out the long run association among the selected variables. Weighted sum of structure activity and structure size of the financial sector is used as a proxy of financial structure. The study finds that the proxy of financial structure is positively correlated with economic growth. The result also pointed out that the channel of transmission mechanism of financial development to growth is efficient to the financial sector not the volume of investment.

Determinants of Import Demand Functions of Pakistan: An ARDL Bound Testing Approach

This study attempts to examine the factors that determine the import demand function of Pakistan using time series data of 1973-2013. Autoregressive Distributed Lag bounds testing approach cointegration is used to determine long run while ECM in ARDL framework to determine short run adjustments. The results showed substantial proof of the existence of a cointegration association at various degrees among variables included in the models.

Impact of Money Supply on Current Account: Extent of Pakistan

The purpose of this research is to find out the empirical association among money supply, current account, exchange rate, and industrial production, for this purpose we have used (Johansen, 1988) co integration technique to analyze the long run relationship and Error Correction model to estimate the short run dynamics by using annual data for the period of 1975 to 2008. The domestic variables support long run relationship and weak relation in short run. Fragile combination of fiscal and monetary policy, finding supports Jcurve theory and expenditures switching affect theory.