The current account balance of Pakistan 1972-2005: A cointegration analysis

Abstract

This study aims to find the factors that influence the current account balance of Pakistan. In this study, we utilized cointegration and error correction modeling techniques in estimating the long run behavioral relationship between Pakistan's current account balance and different economic variables. The empirical results advocate that there exists a significant long term relationship between the current account balance and the balance of trade, domestic saving, total consumption and workers remittances during the observed period 1972 to 2005. © 2007 Asian Network for Scientific Information.