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The trend of fiscal policies in pakistan's economy: a descriptive analysis

Author

Listed:
  • Shahid ALI

    (Lecturer in Economics, University of Swat)

  • Fazli RABBI

    (Assistant Professor, Department of Economics, University of Swat.)

Abstract

Recognizing the importance of sound fiscal policy, the present study analyses the link between fiscal policy and macroeconomic activities for Pakistan's economy for the period 1972 – 2008. The study also examines the effectiveness of fiscal policy under different political regimes. Moreover, this study briefly reviews the government expenditures, tax revenues and sources of financing the budget deficit. After the brief investigation of the structure of Pakistan economy, this study concludes that the effects of budget deficit on macroeconomic activities are different in Pakistan from other lagging economies. The response of current account balance and private consumption to rising budget deficit is also not in accordance with neoclassical views. In case of Pakistan, increase in government expenditures lead to an increase in the level of private consumption. The diverse nature of Pakistan's political regime may have attributed to the dynamics in fiscal policy.

Suggested Citation

  • Shahid ALI & Fazli RABBI, 2010. "The trend of fiscal policies in pakistan's economy: a descriptive analysis," Economics Bulletin, AccessEcon, vol. 30(4), pages 1-27.
    • Handle: RePEc:ebl:ecbull:eb-10-00655
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    More about this item

    Keywords

    Fiscal Policies; Government Expenditures; Taxation and Revenues;
    All these keywords.

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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