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Journal of Finance & Economics Research - Volume 1, Issue 1 2016
By Furrukh Bashir, Farzana Yousaf, Huda Aslam
10.20547/jfer1601105
Keywords: Population, government expenditure, exports, imports, government revenue,electricity generation, consumer price index, auto-regressive and distributed lag model
In order to achieve the objective, time series data is collected over a period of 1972 to 2014. Auto-regressive and distributed lag model is utilized for long run and short run results. The demand side factors of inflation are population, roads and government expenditure while supply side factors are imports, government revenue, electricity generation and external debt. In the long run, inflation is caused by roads, government expenditure, imports, government revenue and external debt. There is decline in price level due to foreign direct investment, electricity generation and population in long run.