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The impact of fiscal policy on economic growth. A case Study of Pakistan (2002-2014)

Hausarbeit 2016 28 Seiten

VWL - Wettbewerbstheorie, Wettbewerbspolitik


In this study we will assess the impact of fiscal policy on economic growth during the period of 2002-2014. The data of the study will be collected from economic surveys of Pakistan various editions, statistical supplements and Budget documents. To check the stationarity of the data, computer software will be used for a fitting auto-regressive time series model. The study is designed as follows: Literature available on this topic is analyzed in section two, objective of the study, hypothesis of the study, model fitting, source of data, methodology, conclusion and references are presented in chapter three, four, five, six, seven and eight respectively.

Fiscal policy is the effective and practical policy of all governments. Under fiscal policy a government uses its expenses or expenditures (developmental and non-developmental) and revenues (taxes and non-taxes) to produce desirable effects on economic activities and avoid undesirable ones on the national income, production and employment opportunities in a country. It also plays a vital role in the leading overall economic activities. According to F.R.Glahe (1985), “By fiscal policy is meant the regulation of the level of government expenditure and taxation to achieve full employment without inflation in the economy”.

If the mass community of a country have an access to comparatively superior and abundant commodities, if the per capita income is accumulative, if the lives of the public are becoming easier and luxurious and if value added commodities are available in the market over a long period of time then it means that the country is economically growing and economic growth is taking place. As economic growth is a multidimensional phenomenon. It depends upon a large number of macro inputs. It is affected by various variables and lays impact upon different social and economic indicators. Therefore, it becomes laborious and even impossible to analyze behaviors of those variables in a single research. Therefore the researcher decided to see the behavioral changes brought by Total Revenue, Total Expenditure, Current Expenditure, Defense, Interest Payment and Development Expenditure in economic growth. Their impacts are analyzed upon economic growth.


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Titel: The impact of fiscal policy on economic growth. A case Study of Pakistan (2002-2014)