A Study on Saving Functions for Pakistan: The Use and Limitations of Econometric Methods

doi: https://doi.org/10.35536/lje.2001.v6.i2.a4

Aqdas Ali Kazmi



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Abstract

The econometric estimates of saving functions for Pakistan covering the period 1960-88 are presented and examined in this study. The choice of this period for analytical purposes was necessitated by the availability of consistent time series data on numerous microeconomic and macroeconomic variables required for estimating a wide range of econometric models of saving behaviour. The study is divided into nine sections. The introduction and the basic issues for estimating saving functions are outlined in Section 1. Section 2 delineates Sectoral Accounting Framework for defining the inter-relationship between the main components of savings, investment and national income. Section 3 outlines the econometric methods, the nature of variables used and the basic saving functions for Pakistan. Section 4 deals with the important hypotheses about private sector saving behaviour and estimates of the related saving functions. The basic rationale and estimation of public saving functions have been taken up in Section 5, while the results of foreign savings functions are presented in Section 6. The model specification and estimation of domestic saving functions and national saving functions are covered in Section 7 and Section 8 respectively. The conclusions and limitations of the study are briefly discussed in Section 9.

Keywords

Pakistan, employment potential, policy, employment, elasticity of substitution