180
Journal of Finance & Economics Research - Volume 5, Issue 2 2020
By Sareer Ahmad, Majid Ali
10.20547/jfer2005202
Keywords: Economic growth, Tax, ARDL, Fiscal Policy.
This study intends to observe to investigate the taxation impact on economic growth of Pakistan by using time series data from 1980 to 2015. This study explore the short \& long run effects of taxation on economic growth of Pakistan. Stationarity of the data checked through Augmented Dickey Fuller (ADF) test and then applied Autoregressive Distributed Lag (ARDL) model to check relations among the variables. Results of the study shows that taxes and exchange rate show negative but significant effect on economic growth in short run and long run. Life expectancy and trade liberalization have positive impact on economic growth in both periods. Thus, policymakers should focus on fiscal policy which is necessary to promote sustainable economic growth.