The Mediating Role of Inflation in the Relationship between Currency Depreciation and Economic Growth

This study investigates the role of inflation as a mediator between currency depreciation and economic growth in Pakistan from 1972 to 2016. Using the Ng-Parron unit root test, the stationarity of the variables is determined. The outcomes of Ng-Parron unit root tests indicate that all variables in t...

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Bibliographic Details
Published in:Global Social Sciences Review 2022-03, Vol.VII (I), p.417-427
Main Authors: Ali, Naveed, Hassan, Izhar Ul, Wahab, Abdul
Format: Article
Language:English
Online Access:Get full text
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Summary:This study investigates the role of inflation as a mediator between currency depreciation and economic growth in Pakistan from 1972 to 2016. Using the Ng-Parron unit root test, the stationarity of the variables is determined. The outcomes of Ng-Parron unit root tests indicate that all variables in the model exhibit mix-order integration. This paper also employs the Autoregressive Distributive Lag Model (ARDL) to evaluate the relationship between currency depreciation, inflation, and economic expansion. The results show very clearly that the inflation rate does not play a role in the link between currency depreciation and economic growth in the case of Pakistan.
ISSN:2520-0348
2616-793X
DOI:10.31703/gssr.2022(VII-I).38