A Causality Analysis of Foreign Inflows in Pakistan

Abstract

The objective of the study is to investigate the cause and effect relationships among foreign inflows of Pakistan using time series data from 1972 to 2015. The results are estimated using Descriptive statistics, correlations and granger causality test. The study concludes strong evidence of correlation among foreign inflows (Exports, External Debt, Foreign Aid, Imports, and Worker Remittances) of Pakistan. Bi-directional causality is established between External Debt and Exports; Imports and Foreign Direct Investment.

Keywords: Exports, External Debt, Foreign Aid, Imports, Worker Remittances, Foreign Direct Investment