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Import Functions for Pakistan – A Simultaneous Equation Approach
Mohammad Afzal
Published:July - Dec 2001
It is highly desirable that the behaviour of imports is studied in both
demand and supply scenarios. Many studies in international trade have
estimated the price elasticities of demand but very few studies have been used
to study supply behaviour in international trade. However, Khan (1974),
Haynes and Stone (1983 a) and Arize (1986), using Simultaneous Equations
estimation have reported estimates of import supply in international trade. To
study the true behaviour of imports, the choice of the functional form is
important. Different researchers have used different forms according to their
objectives and inclinations. Leamer and Stern [(1970), pp.8-19] have discussed
at length the functional form of the import demand but they have not said
anything about import supply. Leamer and Stern (1970) noted that the linear
and log-linear forms of the import demand are:
KEYWORDS:
Pakistan, domestic income, imports, economic theory, liberalisation.
JEL:
N/A.
Concepts, Strategies and Proposals for the development of Urban Communities
Anjuman Mimaran
Published:July - Dec 2001
A recent discussion conducted by the Anjuman Mimaran1
has
generated a concept for urban development that has immediate relevance to
Pakistan. It is based on high-density, low-rise, low-tech development that
integrates housing employment and social infrastructure, with a balanced
mix of income and occupational groups. This concept includes a location
strategy that results in
• Affordable housing for all income levels;
• Release of pressure on existing urban centers
• Injection of economic activity into rural areas; and
• Sustainable “green” urban communities;
The following extract from the discussion describes the central
argument, supported by a physical layout and analysis of the proposed
model.
We would welcome any initiatives to take these proposals further
towards practical implementation.
KEYWORDS:
Pakistan, urban development, walkable city.
JEL:
N/A.
Interest and the Modern Economy: A Reply
Ali Ataullah & Minh Hang Le
Published:July - Dec 2001
“No single human being, human agency or group has a right to
impose its view, in matters of the faith, on others. That must be left to every
individual conscience to decide for him or her … Religious leaders and jurists,
with their literalist training, often lack knowledge of societies and economies
to have insights that may illuminate the fresh significance of old formulae”1
.
In the previous issue of this journal, Zaman & Zaman (2001), by
criticising Hamza Alavi, imply that the implementation of the so-called Islamic
Banking is in the best interest of economy and only by following this system
can we be serious Muslims. According to them, this implementation could be
justified on the basis of modern economic and financial theories, and also by
evaluating the financial system of developed countries. This paper only briefly
discusses some acute theoretical and practical shortcomings in their article and
suggests that the non-interest based system2
is not appropriate for the
Pakistani economy, at least in the conceivable future.
KEYWORDS:
Response, interest, modern economy, Islamic banking, criticism, equity financing and asymmetric information.
JEL:
N/A.
Note: Pakistan’s Debt Position and the Question of Debt Retirement
Qais Aslam
Published:July - Dec 2001
There can not be any doubt in the minds of economists,
sociologists, political scientists or the general public that external debt has
become a burden for poor nations rather than the much-advertised source
of financial help to these countries. In the words of the late Cardinal Hume,
Archbishop of Westminster, “Whatever the detailed history of today’s debt
ridden countries, nearly all have one key fact in common: that those who
could be blamed the least, the poorest people in the poorest countries, have
suffered the most”. The British Chancellor of the Exchequer Gordon Brown
said, “The debt of poor countries is a great moral issue of our day and this
decade. It is the greatest single cause of poverty and injustice across the
earth and potentially one of the greatest threats to peace”. He added, “We
must cut the debt and do so now”. In the words of Mikhail Gorbachev,
“Nothing is more important than the debt question. It is absolutely
necessary to resolve the problem as soon as possible. We cannot keep
waiting”. The great African leader Julius Nyerere said, “Is it right that we
starve in order to pay our debts?”
KEYWORDS:
Pakistan, debt retirement, debt burden, debt position, balance of trade.
JEL:
N/A.
Published:July - Dec 2001
Vinod Thomas, Mansoor Dailami, Ashok Dhareshwar, Daniel Kaufmann,
Nalin Kishor, Roman Lopez & Yan Wang - - - The Quality of Growth –
Oxford University Press. 2000, pp. 231. Price not mentioned.
“The Quality of Growth” is a combined effort of economists at the
World Bank to give a broader perspective of development and the means of
measuring it at the end of the 20th century.
The 1st chapter focuses on the development scene over the last four
decades from 1960 to 2000, in terms of natural and environmental growth
factors besides the conventional GDP measures. It highlights the importance
of sustainable development and the factors that need to be emphasised for
growth in development in real terms, accounting for elements such as; life
expectancy, education, air and water pollution, reduced mortality rate,
higher literacy rates besides increased income levels.
KEYWORDS:
Book review, quality of growth, World Bank, government agencies.
JEL:
N/A.
Book Reviews: Migration, Common Property Resources and Environmental Degradation: Interlinkages in India’s Arid and Semi-arid Regions
Shamyla Chaudry
Published:July - Dec 2001
Kanchan Chopra & S. C. Gulati, Migration, Common Property Resources
and Environmental Degradation: Interlinkages in India’s Arid and Semi-arid
Regions; SAGE Publications, New Delhi, 2000. pps 164. Price Rs. (Indian)
350/-.
This book tries to develop linkages between poverty, environmental
degradation, and migration. The premise is that poverty leads to
environmental degradation, and degradation of natural resources in rural
areas, which results in ‘degradation’ pushed ‘imigration’ to urban areas and
this also happens to be the major cause of the degradation. The book uses a
complex set of hypotheses, which have been tested with primary data inputs
from field-based surveys in Rajasthan, India.
KEYWORDS:
Book review, India, poverty, migration, environmental degradation, policy recommendation.
JEL:
N/A.
Published:July - Dec 2001
Tasneem Ahmad Siddiqui, Towards Good Governance, Oxford University
Press, Karachi, 2001, Price: Pak Rs. 495/-.
Tasneem Ahmad Siddiqui is a bureaucrat turned author and that in
itself speaks volumes about the book under discussion. It is an absorbing
and refreshing publication, but somewhat lacking in expression. It is amply
apparent that the author has his heart in the right place and the ideas are
sound and convincing. In essence, though replete with insights and jarring
home truths, it is an exhaustive litany of laments and then, eureka, the
author has simple, easy to follow solutions to all the ills plaguing Pakistani
society. The saving grace of course is that unlike the majority of Cassandralike intellectuals of whom there is no dearth, Siddiqui hopes against hope
and sees a plausible way out of the morass.
KEYWORDS:
Book review, good governance, mechanisms, Pakistan.
JEL:
N/A.
Capital Flows, Trade in Widgets and the Exchange Rate
Irfan ul Haque
Published:Jan - June 2001
The economics profession has recently started to give increased
recognition to the need for restraining capital movements and exercising
greater care in opening up capital accounts in developing countries.1
This is
a significant development, for, not long ago, unfettered flow of capital
across countries was being hailed as a means for improving global efficiency
and promoting world welfare. At its annual meetings in 1997, the IMF had
pushed to incorporate capital account convertibility into its Articles of
Agreement. However, the gravity of the East Asian crisis drove home the
dangers inherent in premature deregulation of financial markets and freeing
of capital movements, at least as far as developing countries are concerned.
KEYWORDS:
open trade regimes, free capital mobility, market liberalism, exchange controls, capital account.
JEL:
N/A.
Social and Economic Development - A Rights Puzzle
Pervez Tahir and Sara Fatima
Published:Jan - June 2001
Everyone has the right to a standard of living adequate for the
health and well being of himself and of his family, including food, clothing,
housing and medical care and necessary social services, and the right to
security in the event of unemployment, sickness, disability, widowhood, old
age or other lack of livelihood in circumstances beyond his control. Article
25.1 of the Universal Declaration of Human Rights, 1948.
States should undertake, at the national level, all necessary
measures for the realization of the right to development and shall ensure,
inter-alia, equality of opportunity for their access to basic resources,
education, health services, food, housing, employment and the fair
distribution of income. Effective measures should be undertaken to ensure
that women have an active role in the development process. Appropriate
economic and social reforms should be carried out with a view to
eradicating all social injustices. Article 8.1 of Declaration of the Right to
Development adopted by the General Assembly Resolution 41.28 on 4
December 1986.
KEYWORDS:
Pakistan, social development, economic development, standard of living, equal opportunity, Constitution of Pakistan.
JEL:
N/A.
Macroeconomic Variables as Common Pervasive Risk Factors and Empirical Content of the Arbitrage Pricing Theory in Pakistan
Ali Ataullah
Published:Jan - June 2001
The Arbitrage Pricing Theory (APT) of Ross [1976] is one of the
most important building blocks of modern asset pricing theory, and the
prime alternative to the celebrated Capital Asset Pricing Model (CAPM) of
Sharpe [1964], Lintner [1965], and others. This paper briefly reviews the
theoretical underpinnings underlying the APT and highlights the
econometric techniques used to test the APT with pre-specified
macroeconomic factors. Besides this, the prime objective of this study is
to perform an empirical test of the APT in the Pakistani stock market by
using pre-specified macroeconomic factors and employing Iterative NonLinear Seemingly Unrelated Regressions (ITNLSUR). These empirical
results will be, hopefully, helpful for corporate managers undertaking
cost of capital calculations, for domestic and international fund managers
making investment decisions and, amongst others, for individual investors
who wish to assess the performance of managed funds.
KEYWORDS:
Arbitrage Pricing Theory, Capital Asset Pricing Mode, Pakistan, arbitrage portfolio, macroeconomic factors.
JEL:
N/A.