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The Impact of Taxation on Economic Growth Using ARDL Approach: A Case Study of Pakistan

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  • Sareer Ahmad, Majid Ali

    (Quaid-e-Azam University, Islamabad)

Abstract

This study intends to observe to investigate the taxation impact on economic growth of Pakistan by using time series data from 1980 to 2015. This study explore the short \& long run effects of taxation on economic growth of Pakistan. Stationarity of the data checked through Augmented Dickey Fuller (ADF) test and then applied Autoregressive Distributed Lag (ARDL) model to check relations among the variables. Results of the study shows that taxes and exchange rate show negative but significant effect on economic growth in short run and long run. Life expectancy and trade liberalization have positive impact on economic growth in both periods. Thus, policymakers should focus on fiscal policy which is necessary to promote sustainable economic growth.

Suggested Citation

  • Sareer Ahmad, Majid Ali, 2020. "The Impact of Taxation on Economic Growth Using ARDL Approach: A Case Study of Pakistan," Journal of Finance and Economics Research, Geist Science, Iqra University, Faculty of Business Administration, vol. 5(2), pages 89-95, October.
    • Handle: RePEc:gei:jnlfer:v:5:y:2020:i:2:p:89-95
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    References listed on IDEAS

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    5. Durusu-Ciftci, Dilek & Gokmenoglu, Korhan K. & Yetkiner, Hakan, 2018. "The heterogeneous impact of taxation on economic development: New insights from a panel cointegration approach," Economic Systems, Elsevier, vol. 42(3), pages 503-513.
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