Effect of Globalization on Gross Domestic Product in Pakistan

Abstract

The effect of globalization varies from one country to another, contingent upon the level of social, financial, trade, economic and political changes. This paper determines the relationship between globalization on the total Gross Domestic Product of economy of Pakistan through dynamic ARDL auto regressive distributed lag simulations model in short and long term for the time between 1970-2019. In this article unit root test PP and ADF were used to examine the stationarity of the used variables. The findings demonstrate that the used series are stationary at level and first difference that confirm that dynamic ARDL simulations model can be used. The findings of the dynamic ARDL simulations indicates that social, financial, trade, economic and political globalization helps to increase the economic growth of Pakistan one the other hand the findings demonstrate that inflation, exchange rate, money supply and population causes to decrease the economy growth of Pakistan. Recommendations are suggested based on the findings of this project.