MACROECONOMIC EFFECTS ON ECONOMIC GROWTH: NOVEL DYNAMIC ARDL SIMULATION MODEL BASED TIME-SERIES EVIDENCE FROM PAKISTAN
Keywords:
Economic Growth, FDI, Oil Consumption, NARDL, PakistanAbstract
A study on economic growth is vital for driving innovation, increasing productivity, and informing evidence-based policies to foster sustainable development. This study examines the internal and external determinants of Pakistan’s economic growth on the data from 1980 to 2025 and analyses the empirical findings by using a Novel Dynamic Autoregressive Distributed Lag Simulation Model (NARDL). Results settle long-run cointegration among Gross Domestic Product (GDP), Foreign Direct Investment (FDI), exports, imports, inflation, and oil consumption. FDI and exports show persistent positive effects on GDP across both time horizons. Whereas, the effects of inflation and imports vary by timeframe. Oil consumption reveals a critical dual impact that is stimulating growth in the long run nevertheless exerting negative pressure in short run. These findings offer vigorous empirical evidence for policymakers to understand the significance of FDI, trade dynamics, and energy consumption for a sustained macroeconomic stability of Pakistan.
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This work is licensed under a Creative Commons Attribution 4.0 International License.
