Private Investment, Personal Remittances and Economic Growth of Pakistan

Abstract

The present study is conducted to find out the association among the variables such as private investment, personal remittances and economic growth in the short run as well as in the long run. Time series data is employed from 1976 to 2013 from world data bank. Johansen cointegration test is used to find out the long run relationship among the variables such as personal remittances, private investment and economic growth. The results indicates that all three variables are cointegreted in the long run. Furthermore study applied VECM to detect the short run adjustment in variables to attain equilibrium in the long run. However, the results indicated that in short run Economic development takes time to converge its equilibrium.