The Impact of Financial Development on Economy of Pakistan

This study aims to examine the impact of financial development on economy sector of Pakistan. Regional economic growth and financial development cycles can trace major global and unobserved factors evolved overtime. However, economic growth and financial development are explaining the fluctuations in the economy, which plays an important role for development of any economic sector. Whereas, Augmented Dickey Fuller Test (ADF) and Phillips Perron (PP) test are used to check the individual stationarity of each variable. Augmented Dickey Fuller test is used to estimate the unit root test. Johnson co-integration test is also used to check the long run relationship between the variables. The overall results shows a positive significantly impact of financial development on economic growth of Pakistan, expected some years of nineties when stock markets became in negative figure. However, F- statistics shows overall positive significant impact of the mod