Determinant of Balance of Trade: Case Study of Pakistan

European Journal of Scientific Research, Vol. 41, No. 1, pp. 13-20, 2010

8 Pages Posted: 13 Feb 2012

See all articles by Sulaiman D. Muhammad

Sulaiman D. Muhammad

Federal Urdu University of Arts Science & Technology

Date Written: 2010

Abstract

The core object behind this study is to explore the long run as well as short run determinant of trade deficit with reference to Pakistan by using Johansen co-integration approach and Error correction model (ECM). The finding of this study suggests that foreign income, foreign direct investment, domestic house hold consumption and real effective exchange rate are significantly affect the trade deficit. To highlight the short run dynamics VECM (Vector Error correction model) was used. The result of VECM pointed out that there is disequilibrium in the short run which will be adjusted within one year.

Keywords: Deficit Balance of trade

Suggested Citation

Muhammad, Sulaiman D., Determinant of Balance of Trade: Case Study of Pakistan (2010). European Journal of Scientific Research, Vol. 41, No. 1, pp. 13-20, 2010, Available at SSRN: https://ssrn.com/abstract=2003785

Sulaiman D. Muhammad (Contact Author)

Federal Urdu University of Arts Science & Technology ( email )

Sector G-7/1, Main University Road
Gulshan-e-Iqbal
Karachi, Sindh 744000
Pakistan

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
2,410
Abstract Views
6,050
Rank
11,076
PlumX Metrics