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Examine the effects of money supply m1 and gdp on fdi in pakistan

Author: 
Nouman Shafiq, Habib Ahmad and Shah Hassan
Subject Area: 
Social Sciences and Humanities
Abstract: 

The primary function of that study is to analyze the result of money supply and GDP on FDI in case of Pakistan. Funds offer should be to extra amount of cash within economy to own land of which requires large charge regarding inflation. When CPI, Rate of interest are not manipulated using within recommend boundaries then additional money improve additional inflation in a economy. In case most of us improve marketplace, agriculture, education and learning, health insurance and essential infrastructures then your funds offer could well be smaller as well as inflation reduces as well as Gross Domestic Product raise keeping that in mind. We have to take this in consideration and runs Base-line regression model to see how these variables effective in Pakistan for the period 1970-2013. We use Generalized Method of Moments (GMM) and we found that co-efficient of Money Supply (M1) and Gross Domestic Product (GDP) is positively significant on foreign direct investment (FDI). Nevertheless, unavailability of facts for the different critical determinants like corporations, labor prices along with actual physical facilities can be deemed as limitation your examine. For the future study, locating information in politics stability may also be another enhancement.

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