1. Key Sectors And GDP: Cointegration And Causality Analysis For Pakistan Economy.
- Author
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Akhter, Nasim, Malik, Arshad Mehmood, Yasir, Maryam, and ayub, Aneeda
- Subjects
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TIME series analysis , *COINTEGRATION , *GRANGER causality test , *SERVICE industries , *GROSS domestic product - Abstract
The agricultural, Industrial and Services sectors have crucial role in the economic development of Pakistan economy. The goal of this study was to investigate the interrelationships among the key sectors and between the key sectors and GDP. To accomplish the study time series data ranging 1950 to 2014 were obtained from different sources. Stationarity analysis of time series was made by applying Augmented Dickey- Fuller and Philips - Perron unit root tests, stationarity analysis indicated that all the variables were not level I (0) stationary but differenced I (1) stationary which satisfied the condition of same order of integration and study variables to be cointegrated. Correlation analysis depicted positive and negative correlations among study variables. To attain the objective of the study Engel Granger two step method was applied. The co-efficient indicated long run relationship among the variables. The Error Correction Model’ short run coefficient was found significant and depicted convergence to long run equilibrium. The Granger causality analysis explored the existence of bidirectional causality between agriculture and GDP, bidirectional causality between industry and GDP, bidirectional causality between GDP and services sector, unidirectional causality between industry and agriculture and industry was found granger cause agriculture, bidirectional causality between agriculture and services sector and indicated unidirectional causality between industry and services sector and industry was found granger cause services. [ABSTRACT FROM AUTHOR]
- Published
- 2022