Trade Openness, Remittances and Growth: An ARDL Analysis

Abstract

This research investigates the impact of trade openness and remittances on economic growth of Pakistan by using annual time series data from 1972-2019. The data has taken from World Development Indicator (WDI). The study used Autoregressive Distributed Lags (ARDL) Model to check the relationship between variables. Unit root test is used to check the stationarity of data. The finding of the study shows, that in the long run time  there is positive relationship between GDPPC and LFPR and Remittances and negative relationship with GFCF and Inflation .LFPR has positive relationship with GDPPC and negative relationship with GFCF ,TRADE and INF. The result of the study suggest that for policy implication that Pakistan policy maker should adopted such policies which cause positive growth for economy and policy maker should encourage and motivate the flow of remittances and adopt such policies that insist remitter to send money through proper channels so that these flows can be utilized in a better way for economy.