Abstract:
In ourpaper, we investigate the influence ofExternal Directfunds, Remittances, External Debt
andDomestic Capital on Economic Escalation ofPakistan by using time series analysis over the
period 1976-2015. Ordinary Least squares (OLS), Stability analysis, Co-integration tests,
Stationary analysis by using unitroot test, ECMand Granger Causality test are used to examine
the relation and impact between dependent and independent variables. Whereas Foreign Direct
Investment, Domestic Capital, External Debt, and Remittances used as predictors and “Gross
Domestic Product” used as predictant. The results indicate that FDI and External Debt have
significant andpositive impact on Economic Escalation ofPakistan while Domestic Capital have
substantial but negative impact on Monetary escalation ofPakistan due to not utilizing domestic
resources at theirfull capacity and remittances have insignificant effect on economic uplifting
because people spend those remittances on buying imported items. Government ofPakistan must
have to take incentives, they should invest in varioussectors like infrastructure, tourism andother
in command ofattracting the local and external investors to increase FDIinflows.
