How Terrorism Affect Economic Growth in Pakistan: By Using Co-Integration Approach

Abstract

The aim of this study is to explore the long-term relationship between economic growth and terrorism. Johansen Co-integration analysis is used to gauge the effect of terrorism on economic growth.  Annual time series data used from the period 1981-2015. Data of terrorism is obtained from GTD (Global Terrorism Database) while the data of economic growth is obtained from WDI World Bank Indicator. The analysis suggests the finding that there is a long-term relationship among the key macroeconomic indicators and terrorism. The present paper fills the gap by using the literature and econometric sophisticated techniques that delivered proof for the relationship among many macroeconomic indicators and terrorism.

Keywords: Co-integration, Economic Growth, Terrorism

JEL Classification: Z 000