The Impact of Interest Rates on Government and Private Investments in Pakistan Economy: An Analysis of Three Decades

Abstract

One of the primary plans of economic policies is to increase investment that is important for better economic performance. This study is conducted to test the effect of private investment, government investment, government expenditure, labor force and, foreign direct investment on the GDP of Pakistan. Further to test the economic performance over the last three decades with the help of dummy variable. Over all 30 years data is used for the study. Result found that there is positive relationship private investment, FDI and, government expenditure. And decade performance negatively correlated to the each previous decade.

Keywords: Interest rate, Government and private Investments, Pakistan Economy