An Asymmetric Econometric Investigation of the Impact of Economic Growth and Fiscal Nonlinearities: An Evidence Regarding Decline of Private investment in Pakistan

Abstract

To quantitatively evaluate the existence of the crowding-in versus crowding-out, this effort will seek to examine the asymmetric econometric association between the level of private investment, GDP growth and the level of public sector development expenditures in Pakistan. Utilizing the time series data, the NARDL regression technique was applied to generate the short run and long-run coefficients of the proposed model. In the short run, the outcomes obtained reveal the positive effects generated by negative development expenditures, contrary to the negative implications associated with positive development expenditures. The study suggests the formulation and implementation of investment encouragement policies to promote economic progress in the country.