Open AccessImpact of Globalization on Major Macroeconomic Variables: Empirical Evidence from Pakistan
Author(s) -
Syra Mumtaz,
Muhammad Zeeshan Younas
Publication year - 2021
Publication title -
journal of quantitative methods
Language(s) - English
Resource type - Journals
eISSN - 2522-2260
pISSN - 2522-2252
DOI - 10.29145/2021/jqm/050102
Subject(s) - openness to experience , economics , globalization , distributed lag , liberalization , inflation (cosmology) , capital account , international economics , financial globalization , deficit spending , economic globalization , macroeconomics , empirical evidence , monetary economics , economic system , market economy , econometrics , philosophy , psychology , social psychology , debt , physics , epistemology , theoretical physics
Globalization is a multi-dimensional phenomena with profound impact on different aspects of the modern world, including economic, social, political, cultural, environmental, and geographical. This study is an attempt to analyze how various components of globalization, i.e., trade openness, financial liberalization and labor mobility impacts the economic dynamics of a developing country affecting the performance of macroeconomic variables including the budget deficit, inflation and economic growth. In this study, we use the terms trade openness and liberalization along with financial openness, financial liberalization and financial development interchangeably. The purpose is to capture the overall impact irrespective of nature as nature may lead to contradictory results. Furthermore, the labour flows give due attention as human capital is an inevitable avenue for the effective and sustainable growth of any country. It is noticed that various global factors effect budget deficits, inflation and economic growth with varying intensities depending upon the size and dynamics of the economy. The empirical analysis involves the time series data of Pakistan from 1973 to 2014. The autoregressive distributed lag (ARDL) methodology is used to obtain the results and policy related suggestions.