Oil Price Shocks

Money supply, deficit, and flash in Pakistan . INTRODUCTION rising prices is a burning issue in Pakistan. It is generally felt that for several historic period Pakistan has had a double-digit inflation. The public sector has used a mix of policies to control inflation, and it is also held responsible for its creation. The consumer price index (CPI) change magnitude over 11 percentage in 1981-82, and over 12 percent in 1990-91. Similarly, sensitive price index (SPI) increase over 15 percent in 1981-82, and over 12 percent in 1990-91. The gross domestic product deflator was also double-digit for several years. Inflation not only affects sectoral allocation and distribution of income but also generates poverty. A prescription might not be admit until the roots of the disease are carefully investigated, which is the very undercoat for carrying out this study. Studies by Hossain (1990) several others concluded that inflation is a monetary phenomenon in Pakistan, while Bilquees (1988) showed that structural factors explained the inflationary member in Pakistan. It is widely disagreed whether property supply is exogenous or endogenous. Vogel (1974), criticising the monetarist approach, argued that further research is needed on the determination of funds supply.

Given this background, this study is intended to identify the variables leading to inflation; the nature of money supply, endogenous or exogenous, is also analysed. sectionalisation 2 of the study provides a brief review of the literature. A model is developed to study the relationship among fiscal deficit, money supply, and inflation. surgical incision 3 contains a description of the empirical results. Section 4 provides the conclusion and policy implications. 2. THEORETICAL BACKGROUND AND books REVIEW (SUMMARY) The fiscal deficit in Pakistan has been alarming during the exist two decades. The fiscal deficit was around 7.4 percent of the GDP during the period of 1970-80, and 7.6 percent during the 1980s. It was 8.5 percent in 1987-88 and around 7.9 percent in... If you want to get a full essay, order it on our website: Orderessay

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