AN ESTIMATION OF EFFECT OF AGRICULTURAL EXPORTS ON THE ECONOMIC GROWTH OF PAKISTAN

Abstract

Agricultural exports are worth taking in Pakistan’s economy. Therefore an estimation was made to aware with the effect of agricultural exports on the economic growth and time series data of agricultural Gross Domestic Product (GDP) and agricultural exports of Pakistan were considered from 1972 to 2015. The pre-requirements of the model employed by using unit root test and found stationary at order of integration one i.e. I (1). The optimal lag selection criteria by using likelihood ratios criterion of order two leaded to estimate Vector Auto Regressive (VAR) model. The findings of Granger causality ensures the existence of bi-directional causality, which explores that the agricultural exports and agricultural GDP moved in a long run relationship mode. It is finally concluded that  the system was convergent in nature as indicated by the impulse response, racier, indicating that, agricultural GDP is a critical factor for enhancing agricultural exports and also true inversely.