Analysis of Investment Scenario in Pakistan: Time Series Evidence.

This paper made an attempt of econometric analysis of the investment situation in Pakistan for the period 1990-2017. The variables including domestic credit, national savings, lagged investment (IV), imports, and the real exchange rate were found to be the major factors affecting investment in Pakistan. Among all, the savings coefficient is positive and insignificant because of savings in Pakistan had no healthy pattern. Exchange rate has adversely affected the investment because of unidirectional causality. Specification and analytical tests supported reliability of the investment does not affect investment model from key econometric issues. The stability test shows that investment fluctuated during the 1990-2017 periods. OLS and GMM results are comparable. OLS estimation results are reliable since these variables do not suffer from Endogeneity problem. [ABSTRACT FROM AUTHOR]