Causality between Macroeconomic Indicators and Stock Market: An Econometric Analysis

We attempt to examine the causality between economic growth and stock market performance of Pakistan for the years 1992M01-2012M12. For this purpose, the test devised by Granger (1988) has been employed. The results reveal a bi-directional causality between economic growth and stock market performance of Pakistan proxied by Karachi Stock Exchange capitalization (KSECAP). Once this bidirectional causality is established, a system of simultaneous equations has been specified and estimated by 2SLS to find the impact of economic growth and selected macroeconomic indicators on the stock market of Pakistan. The estimated results lead to the conclusion that economic growth affects the stock market of Pakistan and vice versa. The implications of the study are of paramount importance, especially for the emerging economies. Hence, bearing in mind the role of macroeconomic indicators in the performance of stock market a better policy can be formulated to enhance the growth of capital markets that in turn will increase the economic growth of emerging economies such as Pakistan and vice versa.

Shifting Paradigm in the Higher Education Sector of Pakistan during COVID-19: An Empirical Analysis of the Online Teaching Experience

The world is undergoing a dramatic COVID-19 induced transformation in almost every sector of the economy including education. The virus has drastically changed the dynamics of teaching and learning across the globe. This paper is an attempt to examine how COVID-19 has affected the higher education sector of Pakistan. An empirical analysis of the online teaching experience of both the public and private sector university faculty was conducted for this purpose. The current study aims to highlight the need for developing tools for effective teaching that have wide ranging applications in Pakistan, an exercise that requires concerted research effort. Education sector is among the worst hit sectors due to the spread of the coronavirus in Pakistan. Indeed, educational indicators for Pakistan and the current state of the education sector indicate a gloomy scenario. Instructors and students across universities, colleges and schools were ill-prepared for a situation where they had to rely on online teaching and other web-based instructional tools. In this scenario, certain areas in the education sector require extensive research, training and application, such as digital education, assessment tools and applications, project-based learning (PBL), and mobile based strategies for developing self-regulated learners (SLRs) as well as the introduction of various other tools meant to enhance student engagement during the process of learning. The study found that the faculty in the public and private sector universities was not inclined towards online teaching. The results also revealed that the private sector institutions were more facilitating than the public sector institutes. However, the role of HEC during the pandemic was proactive. There is a need to take effective measures at the local and national level to facilitate the student body as well as the instructors lest there is a severe decline in educational indicators or rise in the dropout rate.

Father-Son Formal-Informal Employment Persistence in Pakistan

This paper analyses the intergenerational transmission of formal-informal employment. Using the data from the Household Integrated, Income and Consumption Survey (2015-16) and applying Probit and Multinomial Logit Model, it was manifested that intergenerational persistence is higher in informal employment. The transmission of informal employment from the father to the son is higher in rural regions as compared to the urban regions. Further, scrutinizing informal employment in different occupations revealed its higher persistence in elementary occupations. In the older cohort, the likelihood of the transfer of informal employment as compared to the younger cohort was found to be higher. Father’s occupation remains the primary determinant of the sons’ entry into the labor market. There are limited chances for the sons whose fathers are in low status occupations to move to high status occupations as compared to those sons whose fathers are already employed in high status occupations.

Empirical Implications of Decentralization Dimensions and the Role of Political Institutions in the Economic Growth of Pakistan

Decentralization is the fundamental policy variable used to enhance the allocative efficiency through public spending / tax priorities, subject to the local demand. The current study evaluates the impact of the various dimensions of decentralization on the economic growth of Pakistan for the years 1972-2018. Ng-Perron tests and Kwiatkowski-Phillips-Schmidt-Shin (KPSS) were applied to fix the unit root problem in the time series data. To find the cointegration among decentralization, the role of institutions, and economic growth the Autoregressive Distributed Lag Approach (ARDL) was used. The outcomes suggested that tax decentralization is a growth promoting policy. On the contrary, administrative and political decentralization negatively affect the economic growth. The analysis shows that political freedom also has a growth retarding impact on the economy. The current study is useful regarding the policy implications of the process of decentralization.

Evaluating the Spectacle of Social Exclusion in Pakistan

Social exclusion is blockage or denied access of people from various rights, resources and opportunities (democratic participation, employment, housing, employment etc) that are normally available to other members of society. The outcome of social exclusion is limited economic, political and social life creating a barrier in the way of potential growth and development. The social exclusion of people is a big challenge for policy makers and researchers now days. This study is an attempt to find out the effects of trade liberalization and tax revenues on socially excluded people of Pakistan covering the time span of 1980-2016. The auto regressive distributed lag model is applied to determine the long and short run relationship among the variables. The findings of the study reveal that trade liberalization and per capita income has vital role to decrease the level of social exclusion while increase in tax revenues is increasing the social exclusion. Further globalization of the economy is suggested for social inclusion of the people.

An Empirical Analysis of the Relationship between International Trade and Quality of Life

Ever increasing trade restrictions have severe consequences for the quality of human life. Since improving the quality of life (QoL) is the core of economic development, therefore, it is important to investigate the factors affecting it. International trade is an important factor which affects QoL. Therefore, the current study is an attempt to analyze the nexus of international trade and QoL in the member countries of the United Nation Development Program (UNDP). Since QoL is a subjective measure, therefore, human development index (HDI) was used to empirically measure it. Data of 184 UNDP member countries for a period of 28 years (1990-2017) was analyzed in the current study. Both cross-sectional and panel data analysis techniques were used. The results indicated that international trade positively affects QoL. Hence, it was concluded that instead of remaining a closed economy, countries should promote international trade to improve the QoL of their people.

Measuring the Impact of Coronavirus at Grassroot Level in Pakistan: Perils, Pitfalls and Preventive Strategies

At the forefront of strategists and policymakers' minds stand the catastrophic circumstances of COVID-19 in Pakistan. Severe trauma of unprecedented economic shocks and financial crises brought the country's mechanism to experience a sudden halt. It is necessary to consider how to accelerate recovery and mitigate the spread of negative consequences affecting sectors, industries, institutions, and diverse ventures. Amidst the existing vulnerabilities imposed by inadequate resources and constrained mobility of necessities, the sustainable measures balancing costs and benefits will equip Pakistani communities to fight the corona war proficiently. We analyze the size of adversities hurting various types of individuals, variations in an inflow of economic and financial activities, and reactions to massive disturbances, albeit to different levels. Aligned with in-depth insights and findings, the development of preventive strategies in these desperate times can protect Pakistan's economy from long-lasting disruptions, landing on the safe zone over the coming years. Received Date: October 13, 2020 Last Received: December 10, 2020 Acceptance: December 30, 2020

An Assessment of the Smart COVID-19 Approach to Lockdown and its Empirical Evidence

COVID-19 is a new and contagious disease that has changed human lifestyle and habits globally according to the directions provided by the World Health Organization (WHO). Until some authentic remedy or vaccine becomes available, every country is providing instructions to its public to follow precautionary measures. These measures may include lockdown, social distancing, restricting movement, and educating public about COVID-19. Lockdown is the most applied and successful way to control the virus spread and it remains helpful in curtailing the spike. However, it adversely affects developing countries like Pakistan. All types of lockdown disrupt the life of the poor and the middle class. In this paper, an intelligent-smart approach is suggested for developing countries as against complete lockdown to handle the pandemic. This approach will show the long-term results needed for controlling COVID-19 without creating any major disturbance in the economy. In this paper, evidence based approaches were used to evaluate the short-term and long-term effects of the daily increasing number of cases of COVID-19 in Pakistan. The results showed that Sindh, which has the maximum number of COVID-19 cases, is better in implementing smart lockdown as compared to other administrative regions of Pakistan. As the risk of the second wave of COVID-19 is enhanced, it would be effective to continue the intelligent-smart approach with mild SOPs to avoid the disastrous effects of COVID-19 in the future. Received Date: May 14, 2020, Last Received: December 10, 2020 Acceptance: December 25, 2020

Economics of COVID-19: A case of Punjab, Pakistan

Desperate times call for desperate measures. This study explores those assessment tools which may enlighten the current pandemic situation. It assesses the link between the COVID-19 incidence and its effects on the length of the expected recessionary period in the region. Being a developing economy, the Prime Minister of Pakistan feared that the severity of recession because of a strict lockdown may not be tolerable. This study developed a theoretical model to explain the possible parameters and tradeoffs which can help in the decision to ease the lockdown. Previously, social and print media focused on the reporting of COVID-19 cases and consequently, its mortality rate. This study used the relative forms of recovery and mortality rates to assess their quadratic/nonlinear pattern with respect to time. It is proposed here that the government should use more complicated plots to assess how COVID-19 is evolving and should also prepare a fact-finding team to assess the situation for easing the lockdown. Received Date: June 30, 20202 Last Received: October 10, 2020 Acceptance: December 8, 2020

The Nexus of COVID-19 Pandemic, Foreign Exchange Rates, and Short-Term Returns

The current study examines short-term abnormal returns of eight major currencies including EUR/USD, GBP/USD, USD/AUD, USD/CAD, USD/CHF, USD/CNY, USD/JPY, and USD/SEK in response to the evolution of the COVID-19 pandemic using event study approach in three different scenarios. Firstly, short-term abnormal returns of major currencies are estimated on the day of World Health Organization’s (WHO) announcement declaring COVID-19 as a pandemic. Secondly, they are estimated on the day of the announcement of the first confirmed case of COVID-19 in the respective country. Thirdly, they are estimated on the day of the announcement of the first death from COVID-19 in each country. The results provided evidence that major currency investors earned positive returns in these three different scenarios. The implications of the current study are more important than anticipated. Government policymakers, foreign exchange market regulators, and foreign exchange market participants can anticipate short-term returns while establishing foreign exchange policies, designing rules and regulations, and finalizing trading and hedging strategies, respectively, in situations such as the current COVID-19 pandemic. Received Date: September 20, 20202 Last Received: October 23, 2020 Acceptance: November 13, 2020