Explaining Pakistans Long-Run Growth (Hardcover)

Moazam Mahmood

ISBN 10: 3031866762 / ISBN 13: 9783031866760

Published by Springer International Publishing AG, 2025

About this Item

Hardcover. This book explains the behaviour of output and its growth over time. It does so by deliberating over a choice among three fundamental modelsthe Samuelson-Swan-Solow neoclassical model, the Harrod-Domar model and the Keynesian modelto choose one fit for purpose. The criteria for goodness of fit are some mathematical properties of growth models. The model chosen for meeting these properties is the Keynesian model, which is a bit better on all these counts.The chosen Keynesian model of aggregate demand has been used to explain the observed behaviour of Pakistans long-run growth of gross domestic product (GDP). Pakistans GDP growth over the long run between 1973 and 2019 is marked by a statistically significant hiatus at approximately 1992. Pre-1992, GDP growth on trend approximated 6 percent per annum. Post-1992, it drops on trend to approximately 4 percent per annum. Applied to the hiatus in Pakistans GDP growth after 1992, this model shows that pre-1992, high GDP growth is explained by high investment growth, paired with a low marginal propensity to consume (MPC), while post-1992, lowered GDP growth is explained by lower investment growth paired with a higher MPC. Thus, Pakistans higher GDP growth pre-1992 was investment-led while its lower GDP growth post-1992 has been consumption-led.The book then traces the causality of these trends in investment and consumption to a falling trend in public investment. This is linked to an increasingly austere regulatory policy environment, while private investment fails to step in and maintain aggregate investment. Applied to the hiatus in Pakistans GDP growth after 1992, this model shows that pre-1992, high GDP growth is explained by high investment growth, paired with a low marginal propensity to consume (MPC), while post-1992, lowered GDP growth is explained by lower investment growth paired with a higher MPC. Shipping may be from multiple locations in the US or from the UK, depending on stock availability.

Seller Inventory # 9783031866760

Bibliographic Details

• Title: Explaining Pakistans Long-Run Growth (Hardcover)
• Publisher: Springer International Publishing AG
• Publication Date: 2025
• Language: English
• ISBN 10: 3031866762
• ISBN 13: 9783031866760
• Binding: Hardcover
• Condition: new

About this title

Synopsis

This book explains the behaviour of output and its growth over time. It does so by deliberating over a choice among three fundamental models―the Samuelson-Swan-Solow neoclassical model, the Harrod-Domar model and the Keynesian model―to choose one fit for purpose. The criteria for goodness of fit are some mathematical properties of growth models. The model chosen for meeting these properties is the Keynesian model, which is a bit better on all these counts.

The chosen Keynesian model of aggregate demand has been used to explain the observed behaviour of Pakistan’s long-run growth of gross domestic product (GDP). Pakistan’s GDP growth over the long run between 1973 and 2019 is marked by a statistically significant hiatus at approximately 1992. Pre-1992, GDP growth on trend approximated 6 percent per annum. Post-1992, it drops on trend to approximately 4 percent per annum. Applied to the hiatus in Pakistan’s GDP growth after 1992, this model shows that pre-1992, high GDP growth is explained by high investment growth, paired with a low marginal propensity to consume (MPC), while post-1992, lowered GDP growth is explained by lower investment growth paired with a higher MPC. Thus, Pakistan’s higher GDP growth pre-1992 was investment-led while its lower GDP growth post-1992 has been consumption-led.

The book then traces the causality of these trends in investment and consumption to a falling trend in public investment. This is linked to an increasingly austere regulatory policy environment, while private investment fails to step in and maintain aggregate investment.

About the Author

Moazam Mahmood is Professor of Economics at the Lahore School of Economics, Pakistan, and Visiting Professor at the Capital University of Economics and Business, China.

Rabia Ikram is Assistant Professor at the Lahore School of Economics, Pakistan