The monetarist hypothesis of inflation in Pakistan – a critique.

The aim of the present study is to analyze empirically the significance of the monetarist explanation of inflation in Pakistan. After testing the data for stationarity, the method of least squares is used. Regression analysis shows slight effects of money supply on inflation while, by contrast, structural factors involving wheat, oil and import prices show more substantial effects. The effective control of inflation requires policy makers to smoothen the supply of food and to moderate import prices. [ABSTRACT FROM PUBLISHER]