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Purpose – The purpose of this paper is two folds: first, to analyze the long-run relationship between terrorism and key macroeconomic indicators (GDP growth, GDP per capita, inflation and unemployment) and second, to determine the direction of causality between these variables in Pakistan. Design/methodology/approach – The relationship between terrorism and various macroeconomic indicators is analyzed by applying Johansen cointegration analysis. Furthermore, the causality between terrorism and macroeconomic indicators is tested by applying Toda Yamamoto Granger causality test. Findings – The results show that there exists a long-run relationship between terrorism and key macroeconomic indicators. Furthermore, the results suggest that there exists a bi-directional causality between terrorism and inflation. The causality between GDP per capita, unemployment, GDP growth and terrorism is unidirectional. Originality/value – There is a lack of research work conducted to analyze the long-run relationship and direction of causation between terrorism and various macroeconomic indicators specifically for Pakistan. The current paper fills the gap in the literature by using sophisticated econometric techniques and recent data set to provide the evidence of the relationship between terrorism and various macroeconomic indicators.

The purpose of this study is to analyze the determinants of terrorism in the context of Pakistan. The determinants of terrorism include various socio-economic variables like GDP per capita, unemployment, political rights, inflation, poverty, inequality and literacy level. A long-run relationship between the variables is analyzed by applying Johansen co-integration technique. The Error Correction Model (ECM) is applied to determine the stability of the long run relationship between terrorism and various variables and also to streamline the short-run and long run impacts of the variables on terrorism. In general, the results revealed that there exists a long run relationship between various social and economic variables and terrorism while the results of ECM revealed that about 89% convergence towards equilibrium takes place every year. Similarly, important results are obtained by short run and long run elasticities estimated under the Error Correction Model. Impulse response analysis reveals that the impacts of one standard deviation shock given to random disturbances on the systems of variables have mixed results. Some variables have increasing trend over the time period, some have decreasing trends, while some have fluctuating and cyclical trends.

The purpose of this study is two-fold: firstly, to analyze the long run relationship between household saving and various socio-economic and demographic variables and secondly, to determine the short run and the long run impact of various socio-economic and demographic variables on the household saving rate in Pakistan. The relationship between household saving and various socio-economic and demographic variables is analyzed by applying Johansen cointegration analysis. Furthermore, Error Correction Model is also estimated in order to find out the convergence of the model towards equilibrium. The results show that there exists a long run relationship between household saving and the variables used in the study, while the result of Error Correction Model reveals that about 45% convergence towards equilibrium takes place every year.