A Temporal Analysis of Economic Growth and Its Determinants in Pakistan

Economic growth is the desire of every economy. It is one of the most important variables which need to be explored in any economy, especially in economy like Pakistan which is facing low economic growth. The key objective of the study is to investigate temporal analysis of economic growth in Pakistan using the data set ranging 1978-2014. Impact of human capital, government consumption expenditure (government size), gross total investment, trade and financial development has been estimated on economic growth. For long run and short run analysisJohansen co integration and error correction model respectively have been usedbecause the data was found stationary at its first difference. When data is found stationary at its first difference, then the technique of ordinary least square (OLS) does not work. Government consumption expenditure, human capital, gross total investment and trade have significant positive while financial development has insignificant positive impact on economic growth. The study is important for policy makers because it discusses the impact of some important economic variables on economic growth