Asymmetric impact of inflation and unemployment on poverty in Pakistan: new evidence from asymmetric ARDL cointegration

ABSTRACT

The current study is intended to examine the asymmetric impact of inflation and unemployment on the poverty of Pakistan over the period of 1970 to 2016 by applying asymmetric Autoregressive Distributed Lag (ARDL) cointegration approach. The results revealed the presence of long-run asymmetries among inflation, unemployment and poverty. These findings also confirmed the atypical reaction of poverty to negative and positive shocks in unemployment and inflation. Furthermore, findings also confirmed negative and significant association among health expenditures (HE), population growth and poverty. The findings of the study have relevant implications for policymakers interested in the asymmetric relationship among inflation, unemployment and poverty in Pakistan.

KEYWORDS:

• Poverty
• asymmetric
• NARDL
• inflation
• unemployment

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. http://hdr.undp.org/sites/default/files/reports/256/hdr_1995_en_complete_nostats.pdf.

2. http://www.worldbank.org.

3. https://sustainabledevelopment.un.org/post2015/summit.

4. https://www.unicef.org/about/annualreport/index_96408.html.

5. https://www.adb.org/countries/pakistan/poverty.

6. National Assembly Secretariat (34th session) (pdf).p.18.Retrieved .

7. United Nations Development Programme, Statistics of the Human Development Report.

8. To see asymmetric effect of inflation and unemployment, we have calculated partial sums of positive and negative changes in inflation and unemployment.

9. Federal Reserve Bank of St. Louis.

Additional information

Notes on contributors

Muhammad Saeed Meo

Muhammad Saeed Meo is the founder of Meo School of Research( http://saeedmeo.blogspot.com/), currently working as a lecturer at The Superior College Lahore, Pakistan.