Impact of Expenditure on Economic Growth in Pakistan

Abstract

This study aimed to find out the impact of expenditure on economic growth in Pakistan, using the time series data for the period 1972 to 2013. Secondary data was acquired from World Development indicators and Pakistan Bureau of Statistics. Augmented Dicky Fuller Test (ADF) was applied to check the stationarity of the data. In addition, Johansen Cointegration and Granger Causality tests were applied to empirically investigate the relationship between the variables (expenditure and economic growth) in Pakistan. The results of Cointegration test have indicated that there is no relationship between expenditure and economic growth in the long run.