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The impact of financial openness, trade openness on macroeconomic volatility in Pakistan: ARDL Co Integration approach

Author

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  • Hira Mujahid

    (Applied Economics Research Center, University of Karachi, Karachi-75279, Pakistan)

  • Shaista Alam

    (Applied Economics Research Center, University of Karachi, Karachi-75279, Pakistan)

Abstract

The purpose of this paper is to investigate the relationship between trade openness, financial openness and macroeconomic volatility in Pakistan. For this purpose, time series data from 1970-2010 and ARDL co integration technique was used to find the long run relationship. The results proposed that in the long run, trade openness generates volatility in output and investment, whereas financial openness has significant effect only on investment volatilities. Furthermore, the error correction model suggested that in the short run, trade and financial openness significantly affect output, consumption and investment volatilities.

Suggested Citation

  • Hira Mujahid & Shaista Alam, 2014. "The impact of financial openness, trade openness on macroeconomic volatility in Pakistan: ARDL Co Integration approach," E3 Journal of Business Management and Economics., E3 Journals, vol. 5(1), pages 001-008.
    • Handle: RePEc:etr:series:v:5:y:2014:i:01:p:001-008
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    References listed on IDEAS

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    Cited by:

    1. Ozoemena Stanley Nwodo & Fredrick Onyebuchi Asogwa, 2017. "Global Integration, Non-Oil Export and Economic Growth in Nigeria," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 3(1), pages 59-67, March.
    2. Abiodun Moses Adetokunbo & Ochuwa Priscillia Edioye, 2020. "Response of economic growth to the dynamics of service sector in Nigeria," Future Business Journal, Springer, vol. 6(1), pages 1-10, December.

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    More about this item

    Keywords

    Macroeconomic Volatility; Trade openness; financial openness; Consumption; Investment.;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts

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