Impact of Supply of Money on Food and General Price Indices: A Case of Pakistan

The paper probed the impact of supply of money on food and general price indices by estimating a series of equations taking CPI food, CPI general, WPI food, WPI general, GDP deflator and SPI as measures of inflation and M1, M2 and M3 supply of money as explanatory variables. For analysis, OLS technique is used covering time series data for the years 1975-76 to 2006-07 that was made stationary by Durbin-Watson criterion. AR (1) is used to check autocorrelation. The results for CPI food, CPI general, WPI general, GDP deflator and SPI show that they are negatively related with M1 supply of money. CPI food, CPI general, WPI general, GDP deflator, and SPI are also negatively related with M2 supply of money. The results show that CPI food, CPI general, WPI general, GDP deflator and SPI are positively related with M3 supply of money. It may be concluded that supply of money M1 and M2 affects the food and general indices in the same way. However, M1 supply of money affects the CPI general strongly than CPI food.Inflation, Money supply, Consumer Price Index, Food prices, Sensitive Price Indicator.

Effects of governance on the Environmental Kuznets Curve in South and South East Asian Countries

The objective of this study is to examine whether the better governance can minimise the environmental loss of economic growth at early stages of economic development.For this purpose, this study investigates the impact of governance indicators on the slope of the Environmental Kuznets Curve (EKC) in 19 countries of South and South East Asia for the period 2002-2015.The empirical output of the study reveals that five out of six indicators of governance have a strong impact on the slope of the EKC. Therefore, we conclude that environmental damages of economic growth can be minimised by strengthening the government institutions, rule of law and ensuring the transparency and accountability

Agricultural Land Expansion and Food Security in Pakistan: An Empirical Analysis

This study empirically investigates the impact of agricultural land, urbanization, GDP, food import, and credit to the agricultural sector on food security in Pakistan. The study employs Auto Regressive Distributive Lag Model (ARDL) bound testing procedure to estimate the impact of these factors on food security from the period1990 to 2016. Following the literature, we have employed two dimensions of food security: food availability and food accessibility. Food availability is measured by food supply (kcal/capita/day) while food accessibility is measured by food price indices. The results indicate that agricultural land, GDP growth, and credit to the agricultural sector have a positive and an increase in urban population has a negative impact on both dimensions of food security however, food imports have a positive impact on food availability and a negative on food accessibility in the country

The Critical Review of the Environmental Kuznets Curve (EKC)

The Environmental Kuznets Curve (EKC) stated a nonlinear relationship between income and pollution .According to this hypothesis, economic growth is the cause as well as remedy to the environment problems. Therefore, developing countries should care about the economic growth, and economic growth would automatically care the environment at the later stage of economic development. In this research study, we examined the theoretical and empirical basis of the EKC. We found that given the controversy over the theoretical and empirical basis of the EKC, it cannot be based for the development and environment policies of the world

Crowding Out Effect of Public Borrowing: A Case of Pakistan

To meet the public deficit, Government of Pakistan has been disproportionately borrowing from the scheduled banks and general public which are also the source of funding for private investment. Even the public sector corporations are doing the same. From the crowding out perspective borrowing and public expenditure are the same, as borrowing is mainly undertaken for financing expenditures. The issue of crowding out or crowding in effect of public borrowing on private investment needs considerable attention. The current study has investigated the crowding-out effect of public borrowing on private investment in the country. An investment function of three independent variables, i.e. public borrowing, GDP and lending rate has been estimated through unit root test, co-integration test and vector error correction model. The time series data of 34 years, i.e. fiscal year of 1971-72 to 2005-06, taken from Federal Bureau of Statistics and Finance Division, Government of Pakistan has been used. The results do not corroborate the crowding-out hypothesis in Pakistan explaining the market imperfections and substantial amount of excess liquidity. The results provide the evidence of crowding-in effect, which explains the direction of public expenditures towards private sector through contractors, politicians and bureaucrats, instead of public projects. The provision of subsidy, transfer payments, and substantial amount of micro-credit also explain the phenomenon of crowding-in. The evidence has important implications for fiscal management. To avoid unnecessary inflation and external indebtedness associated with deficit financing, government should rely on domestic sources. As long as excess liquidity prevails in financial system, the domestic resources, other than State Bank of Pakistan may be used to meet the deficit without hurting private investment

Determinants of Food Security in Rural Areas of Pakistan

Abstract: Out of 120 districts of Pakistan (for rural areas) only 40 are food secure while 80 (67 percent) are food insecure. Within these food insecure districts, 38 (46 percent) are extremely food insecure. The matter of food security in rural areas is of immense nature and needs to be probed. A number of factors are responsible for the situation. The current paper examines the determinants of three aspects of food security in rural areas of Pakistan, i.e. food availability, accessibility and absorption. For the purpose a series of models is applied on district level data of rural areas of Pakistan. The production of wheat, rice, maize, pulses, oilseeds, poultry meat and fish at the district level is found to affect food availability positively. All the district except of Sindh are more probable to be food insecure in availability. In the food accessibility electrification and adult literacy emerged as the factors having negative effect. Child immunization, safe drinking water and number of hospitals have shown positive effect on food absorption

Impact of Supply of Money on Food and General Price Indices: A Case of Pakistan

The paper probed the impact of supply of money on food and general price indices by estimating a series of equations taking CPI food, CPI general, WPI food, WPI general, GDP deflator and SPI as measures of inflation and M1, M2 and M3 supply of money as explanatory variables. For analysis, OLS technique is used covering time series data for the years 1975-76 to 2006-07 that was made stationary by Durbin-Watson criterion. AR (1) is used to check autocorrelation. The results for CPI food, CPI general, WPI general, GDP deflator and SPI show that they are negatively related with M1 supply of money. CPI food, CPI general, WPI general, GDP deflator, and SPI are also negatively related with M2 supply of money. The results show that CPI food, CPI general, WPI general, GDP deflator and SPI are positively related with M3 supply of money. It may be concluded that supply of money M1 and M2 affects the food and general indices in the same way. However, M1 supply of money affects the CPI general strongly than CPI food

Determinants of Food Security in Rural Areas of Pakistan

Abstract: Out of 120 districts of Pakistan (for rural areas) only 40 are food secure while 80 (67 percent) are food insecure. Within these food insecure districts, 38 (46 percent) are extremely food insecure. The matter of food security in rural areas is of immense nature and needs to be probed. A number of factors are responsible for the situation. The current paper examines the determinants of three aspects of food security in rural areas of Pakistan, i.e. food availability, accessibility and absorption. For the purpose a series of models is applied on district level data of rural areas of Pakistan. The production of wheat, rice, maize, pulses, oilseeds, poultry meat and fish at the district level is found to affect food availability positively. All the district except of Sindh are more probable to be food insecure in availability. In the food accessibility electrification and adult literacy emerged as the factors having negative effect. Child immunization, safe drinking water and number of hospitals have shown positive effect on food absorption

Impact of Supply of Money on Food and General Price Indices: A Case of Pakistan

The paper probed the impact of supply of money on food and general price indices by estimating a series of equations taking CPI food, CPI general, WPI food, WPI general, GDP deflator and SPI as measures of inflation and M1, M2 and M3 supply of money as explanatory variables. For analysis, OLS technique is used covering time series data for the years 1975-76 to 2006-07 that was made stationary by Durbin-Watson criterion. AR (1) is used to check autocorrelation. The results for CPI food, CPI general, WPI general, GDP deflator and SPI show that they are negatively related with M1 supply of money. CPI food, CPI general, WPI general, GDP deflator, and SPI are also negatively related with M2 supply of money. The results show that CPI food, CPI general, WPI general, GDP deflator and SPI are positively related with M3 supply of money. It may be concluded that supply of money M1 and M2 affects the food and general indices in the same way. However, M1 supply of money affects the CPI general strongly than CPI food

Is environmental kuznets curve (EKC) still relevant?

The main purpose of this study is to evaluate the relevancy of Environmental Kuznets Curve (EKC) hypothesis to the environment problem of today world. According to EKC hypothesis, continuous economic growth eventually reverses the environmental degradation created at the early stage of economic development. This hypothesis emerged in the 1990s and led many serious commentators of economic development to assume that developing countries should focus on economic growth and any environmental problem would be automatically solved by the process of economic growth. The necessary message of EKC was “grow now clean later”. The empirical studies on EKC lead to the conclusion that EKC transition exists only for local pollutants. We found that EKC empirical literature is not econometrically sound and the relationship of many types of pollutants with income has not been tested yet due to the non-availability of data. We also conclude that EKC transition is not Pareto efficient and EKC growth strategy is resource intensive and has huge environmental cost that this planet may not be able to absorb in future. The Key recommendations of the study are that developing world should follow different growth path than that of EKC. They should choose a growth path that is not detrimental to the environment so that stock of pollution created by advanced countries can be contained and advanced countries should make green technologies affordable to developing countries