Analysis of Structural Changes in Pakistan

Abstract

The structure of the economy evolves throughout time. The causal elements of economic development in Pakistan are investigated, along with their relationship with growth. For the empirical analysis, this study uses a time-varying parameter strategy based on the Kalman filter. This is because fixed parameter techniques are unable to account for the influence that structural changes have on parameter constancy. The findings shed light on the significant part that inflation, gross fixed capital creation, gross national product, and inward remittances propel the economy’s growth. However, key macroeconomic drivers have a dynamic, albeit time-varying, influence on the growth process in the country