Macroeconomic Determinants of Savings and Investment in Pakistan

National saving and private investment were the two important macroeconomic variables coupled with micro foundations which play crucial part in economic development, to control inflation and minimize unemployment in Pakistan. The objective of this study was to estimate models for savings and investm...

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Bibliographic Details
Published in:Journal of Business Strategies (Karachi) 2010-12, Vol.4 (2), p.28
Main Authors: Sultana, Samar, Syed, Anwar Ali Shah G
Format: Article
Language:English
Subjects:
Annual reports
Developing countries
Economic development
Economic growth
Five year plans
GDP
Gross Domestic Product
Hypotheses
Independent variables
India
Inflation rates
Interest rates
Investment
LDCs
Low income groups
Macroeconomics
Pakistan
Savings
Studies
Time series
Unemployment
Variables
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Summary:National saving and private investment were the two important macroeconomic variables coupled with micro foundations which play crucial part in economic development, to control inflation and minimize unemployment in Pakistan. The objective of this study was to estimate models for savings and investment which identified important policy variables to stimulate savings and consequently increase investment level in Pakistan. The Autoregressive Distributed Lag method was adopted to find the long-run and short-run dynamics of savings and investment. The results showed that GDP was the major significant determinant of national savings and private investment in Pakistan. The inflation rate had a negative effect on national savings in Pakistan. The high inflation rate and a high interest rate on advances were the major problems in Pakistan to achieve higher economic growth. [PUBLICATION ABSTRACT]
ISSN:1993-5765
1993-5765