...CONTEMPORARY RESEARCH IN BUSINESS EFFECT OF TRADE DEFICIT ON THE ECONOMY OF PAKISTAN Mohsin Abbas Superior University, Lahore, Pakistan Hassan Raza (Corresponding author) University of Lahore, Lahore, Pakistan Abstract This study has conducted to find the effects of trade deficit on the economy of Pakistan in which trade deficit is the independent and gross domestic product, foreign direct investment exchange rate are the dependent variables. Depending on the availability of data we have selected the longest possible sample period to avoid the small sample bias. A sample period of 24 years has been selected for this study for the period of 1988-2011 with annual frequency. We use histogram, scatter plot matrix and the correlations ordinary least square method of regression has been used for the analysis.Histogramof exchange rate show rupees value against U.S dollar are continuously decrease. FDI is also not good, Gross domestic product (GDP) of the Pakistan is also very low trade,In histogram also represent the trade volume (TV) in which imports of Pakistan is very high while export is low. Scatter plot show the positive relationship dependent and independent variables except trade volume. So its result shows if the government working on these variables then trade deficit should automatically decrease like 2003 and 2004 in which our export are more as compare to import .correlation coefficient of trade deficit with gross domestic product, foreign direct investment, exchange rate...
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...late 1990 Where could growth be most appropriate and most beneficial relationship between foreign aid, economic policy and growth of per capita GDP using a new database on foreign aid that had just been developed by the World Bank. They run a number of regressions in which the dependent variable of growth rates in developing countries depends on initial per capita national income, an index that measures institutional and policy distortions, foreign aid and then aid interacted with policies. We find that aid has a positive impact on growth in developing countries with good fiscal, monetary, and trade policies but has little effect in the presence of poor policies.” I will first discuss expanding their dataset to include more recent evidence and then explore how their results are affected even within the original dataset by different definitions of “aid,” “good policy” and “growth.” Easterly, Levine and Roodman (2003) use the exact same specification as Burnside and Dollar (2000), but simply added more data that had become available since their study was performed, as well as hunting for more data in their original sample period of 1970–1993 construct an index number for what is meant by good policy that includes the budget surplus, the inflation rate and a measure of the openness of an economy developed by Sachs and Warner The standard model used to justify aid is called the “two gap” model. It was developed by Chenery and Strout in the mid-1960s. The first...
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...between countries all over the world. With the abundance of goods imported into the United States it has provided us with a surplus. Surplus is typically used to aid in slowing down the economy and balancing out the deficits. When surplus of imports are brought into the United States a deficit is created due the balancing of the trade. According to "United States International Trade Commission" (n.d.), there are three foreign imports that entered into the United States over the years and they are electronic products, transportation equipment and energy-related products. From 2011 to 2013 these three imports from foreign countries have steadily increased. Out of the three imports two of them have been beneficial when there was a change in the economy. During a time period, we had issues within the housing market and agencies were losing money because consumers were unable to afford their mortgages. When it comes to the Gross Domestic Products (GDP) the international trades does have an effect on the economy. The way it is affected is through employment, limiting of consumer spending and operating of imports and exports. When it comes to imports and exports they do have an effect on the GDP. When imports are low and exports are high then this will add to the GDP but when it switched then it contracts the GDP. Depending on how the changes flow it can either...
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...Fiscal Policy Fiscal Policy The United States’ deficit, surplus, and debt have had and are currently continuing to have a profound effect on the economy of this country. Although the federal government could play more of a role in boosting exports through tax reform and training assistance, some industries are staging a comeback on their own without help from Washington, because of improving marketplace trends. Taxpayers and Unemployed Individuals The United States' deficit, surplus, and debt have a very far-reaching effect on taxpayers and unemployed individuals. The immediate effect on taxpayers is as the deficit goes up and debt does as well the taxpayers are going to absorb the brunt of repayment. This will also indicate that as the deficit climbs and debt becomes larger that the dollar will become less valuable. The dollar losing value means that employers as well as consumers will have to be more careful with their money. The trade surplus has very little effect on the consumer because without a tariff in place on the outgoing goods it does not offer much if any of a return to the taxpayers. While the taxpayer and employers are watching every last dollar that makes it harder for the unemployed individual to get a job in his field. At this stage high quality jobs are harder to come by because employers have to make cuts to maintain pre-recession profits. Therefore, unemployed workers are forced to stay on unemployment or try for jobs with lower skill qualifications...
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...this paper I will put emphasis on international trade and foreign exchange rates and how those affect the GDP, domestic markets, and students. I will also outline some of the benefits on goods and services that are imported from other countries and how those contribute to our economy in the United States. International Trade to GDP In order to understand international trade it is important to recognize what the effects of international trade have on the GDP, domestic markets and university students. International trade is essentially when two or more countries exchange goods and services. Many countries export their goods and services to other countries and in turn may also import goods and services from other countries into their own. There have been exceptional achievements with technology, which have made it much easier to trade on an international level. The communication, as a result of these technology advancements, has improved exponentially and it has truly simplified this process. With that being said it can be confirmed that international trade has a profound effect on the GDP, domestic markets and even university students like me. There are many countries that are rich in technology, like China and Japan, and others that have bountiful natural resources, like Iraq, that have a weighty impact on us specifically. The U.S. is one of the largest contributors to international trade and in fact our GDP is overwhelmingly impacted because we are huge import consumers...
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...Bangladesh and its impact on GDP. It involves economic models developed to determine the impact of each sector-Export, Import, Foreign Aid and Remittance, on GDP of Bangladesh. It also involves an analysis of the behavior of these factors in three SAARC countries and the application of the regression model developed. The economic model was developed based on the past behavior of GDP and the external sector. It indicated that Remittance is the sector having the most significant impact on GDP and aid the second most significant. While imports negatively affect economic growth, exports have played a very important role over the period. The remittance of Bangladesh has been increasing over the last few years. Hence, its impact on GDP has also been rising. In the span of 34 years export as percentage of GDP increased from 2.2% to 15.4%. Hence, performance was moderately good. The economy has been suffering from ever increasing trade deficits, despite several export promotional measures. Large import payments mainly account for this problem. Foreign aid shows large fluctuations over the period Finally, an analysis was conducted on the behavior of the external sectors in the SAARC countries using the regression model. Export was found to be the dominant sector in India, while imports had the minimum impact on GDP. Pakistan was found to be more dependent on export and foreign aid than on remittance and import. Sri Lanka’s economy is highly correlated to remittance, aids and export. 1 Literature...
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...with the global economy. These policy reforms were initiated in the mid-1980s against the backdrop of serious macroeconomic imbalances, caused in part by the declining level of foreign aid and in part by a preceding episode of severe deterioration in the country’s terms of trade. The policy reforms in the 1980s included the withdrawal of food and agricultural subsidies, privatization of state-owned enterprises, financial liberalization, and withdrawal of quantitative import restrictions. The beginning of the 1990s saw the launching of a more comprehensive reform program, which coincided with a transition to parliamentary democracy from a semi-autocratic rule. These later reforms were particularly aimed at moving towards an open economy – such as making the currency convertible on the current account, reducing import duties generally to much lower levels, and removing virtually all controls on the movements of foreign private capital. Besides, fiscal reforms were undertaken including the introduction of the value-added tax. During the 1990s, notable progress was made in economic performance. Along with maintaining economic stabilization with a significantly reduced and declining dependence on foreign aid, the economy appeared to begin a transition from stabilization to growth. In the 1980s, per capita GDP had grown slowly at the rate of about 1.6 per cent per annum; the growth rate accelerated to 2.4 per cent in the first half of the 1990s, and further to 3.6 per cent in the second...
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...countries with the global economy increased sharply in the 1990s with change in their economic policies and lowering of barriers to trade and investment. Foreign direct investment (FDI) is expected to benefit poor countries such as Bangladesh in a number of ways. Firstly, it supplements domestic investment which is low due to lack of resources in these countries. Secondly, FDI is expected to generate employment, transfer, increase domestic competition and bring other positive externalities such as transfer of good practices. Bangladesh offers attractive investment opportunities to foreign investors and has adopted policies to attract FDI into the country. In fact Bangladesh seems to offer one of the most liberal FDI regimes in South Asia. The economic model was developed based on the past behavior of GDP and the external sector. It indicated that FDI is the sector having the most significant impact on GDP and aid the second most significant. While imports negatively affect economic growth, exports have played a very important role over the period. During the 1990s, notable progress was made in economic performance. Along with maintaining economic stabilization with a significantly reduced and declining dependence on foreign aid, the economy appeared to begin a transition from stabilization to growth. In the 1980s, per capita GDP had grown slowly at the rate of about 1.6 per cent per...
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...marginalized and dissatisfied. In 1971, East Bengal separated from Pakistan and was renamed Bangladesh. Ever since, economic development has been very slow, hampered by political turmoil. It is one of the poorest countries in the world with nominal GDP per head of only USD 1,483 and 36% of the population living below the poverty line of USD 1 per day. The low level of human development is also reflected in the UN’s human development index, which ranks Bangladesh 146th out of 182 countries. Economic development is also hampered by a high vulnerability to inundations. Each year, about a third of the country is flooded during the annual monsoon rains. This severely affects the agricultural sector, washing away crops. While the agricultural sector is not especially important in terms of economic size, since it accounts only for 18% of GDP, it employs 45% of the country’s labor force. The industrial sector contributes 29% to GDP and within this sector the textiles and garment sector is a key growth driver. Unfortunately, the industrial sector is plagued by the terrible infrastructure and frequent power outages, which have become structural impediments to a higher level of economic growth. The large services sector, which contributes 52% to GDP, is not left unaffected by the power outages. Furthermore, the level of corruption is very high and widespread, affecting the overall business environment. Even so, Bangladesh has...
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...country's gross domestic product (GDP) that is projected to do grow at 7.2 per cent during the year. There are challenges and risks, both domestic and external, that do provide some strong reasons for being not much optimistic at this stage about achieving this growth performance. That does not mean that the growth target itself is overambitious. The actual performance of the Bangladesh economy has otherwise been impressive over the past several years in a row, given the comparative picture of other low-income developing countries and the odds and difficulties, both exogenous and endogenous. But even this performance has been considered below the potential of Bangladesh. This is what the economists, analysts, development practitioners and all others, within and outside, have been stating about Bangladesh over the years. The growth rate, however, is not the sole indicator of 'socio-economic development' in its broad sense. But it unquestionably remains to be one of the important criteria for assessing the overall performance of an economy. The quality of growth -- its nature and dimension of inclusiveness, impact on social development indices concerning the state of education, health, nutrition and, thus, human resource development, income-distribution and employment-generation effects, poverty alleviation efforts etc. -- is also a pertinent point for consideration. The budget through its tax measures and expenditure allocation and use pattern, does have a relevance to both overall...
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...weighted indicators. (1 mark) b Used to measure absolute poverty in less developed countries (1 mark) and its variables are: the percentage of a population likely to die before the age of 40 years (1 mark); the percentage of people over the age of 15 years who are illiterate (1 mark); the percentage of children under the age of 5 years who are underweight (1 mark); the percentage of people without access to public and private services such as health care and clean water. (1 mark) c Used to measure relative poverty in industrialised (more developed) countries (1 mark) and includes: the percentage of people likely to die before the age of 60 (1 mark); the percentage of adults living with functional illiteracy (a degree of illiteracy that does not allow people to function at a basic level in reading and writing) (1 mark); the proportion of...
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...nations face on their way to economic growth and prosperity. The report discuses overpopulation problem and also questions the effectiveness of foreign aid. Moreover, it provides information on impact of information technology, as well as addresses the issue of lack of economic diversification. Finally, it explains causes and consequences of corruption on economic growth. Keywords: Third World, development, overpopulation, foreign aid, technology, diversification, corruption Table of Contents Abstract2 Introduction4 Brief history4 Classifications4 From Third World to First World6 Issues7 Population growth7 Foreign aid8 Information technology11 Economic diversification12 Corruption13 Conclusions16 References18 Economic Development of Third World Countries History The end of the World War II brought into being a number of new nations in Asia and Africa, which gained independence from colonial rule and were given a title of “Third World”. The term was created by French demographer Alfred Sauvy and was originally intended to distinguish newly emerged states from the Western industrialized nations and from those that formed the former Soviet bloc (Prachi, 2011). Today the designation is used to describe the developing countries of Africa, Asia and Latin America, generally characterized as poor, heavily dependent on foreign aid, having unstable governments and the economies that rely on the exports of primary products in return of finished goods, also high rates...
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...targets in developing countries, such as urbanization, industrialization, export promotion, equitable income distribution, and sustainable economic development. Late developing countries can benefit from previous development experience provided they choose the right model1. However, the relationship between infrastructure and economic growth is still frequently debated. This paper will examine the experience of Korea and Japan in infrastructure development for economic growth to acquire some valuable lessons that infrastructure development contributes to economic development in developing countries. 1. Introduction The lack of infrastructure is hindering the economic growth in many developing countries2. Infrastructure investment has the effects of contributing to increase the productivity and it is expected to contribute to future economic growth in developing countries where infrastructure is still insufficient. Therefore, infrastructure development is one of the most integral parts of the public policies in developing countries. Supporting infrastructure development in developing countries by advanced countries is extremely important field. This can be inferred from the fact that many international organizations such as World Bank and OECD are actively promoting the improvement of infrastructure by providing various support programs to developing countries. However, the precise relationship between infrastructure and...
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...on an education program as most of the rural people are not familiar with their land rights “the Tanzanian land Acts of 1999” . The economic liberalization in Tanzania led to a significant increase of production in agriculture as it goes from 3.9 % to 4.8 % between 2005-2009 ( para6 p3). The agriculture sector is indeed important factor in the Tanzanian economy yet its GDP is more affected by tourism and construction. As these two sectors pushed the country s GDP to 7.1% by 2007 and this was the reign of the president Kikwete. In addition to tourism and construction, minerals are an essential earning sector too. Unfortunately, the financial crisis of 2008-2009 affected sharply those sectors “the number of tourists has been reduced and foreign investments has been falling in the sector “(para7 p...
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...question papers 2.2 Detail of question papers 4 4 4 3. CONTENT 6 4. CONCLUSION Copyright reserved 25 Please turn over Economics 1. 3 Examination Guidelines DBE/2014 INTRODUCTION The Curriculum and Assessment Policy Statement (CAPS) for Economics outlines the nature and purpose of the subject Economics. This guides the philosophy underlying the teaching and assessment of the subject in Grade 12. The purpose of these Examination Guidelines is to: • • Provide clarity on the depth and scope of the content to be assessed in the Grade 12 National Senior Certificate (NSC) Examination in Economics. Assist teachers to adequately prepare learners for the examinations. This document deals with the final Grade 12 external examinations. It does not deal in any depth with the School-Based Assessment (SBA). This guideline should be read in conjunction with: • • • The National Curriculum Statement (NCS) Curriculum and Assessment Policy Statement (CAPS): Economics The National Protocol of Assessment: An addendum to the policy document, the National Senior Certificate: A qualification at Level 4 on the National Qualifications Framework (NQF), regarding the National Protocol for Assessment (Grades R–12) The national policy pertaining to the programme and promotion requirements of the National Curriculum Statement, Grades R–12 Copyright reserved Please turn over Economics 4 Examination Guidelines 2. ASSESSMENT IN GRADE 12 2.1 DBE/2014 FORMAT OF THE PAPERS CLASSIFICATION OF TOPICS...
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