DefinePK

Abstract

This research is important for enhancing our understanding of the economic dynamics in Pakistan and can contribute to evidence-based policy decisions for sustainable economic development. Previously, numerous investigations put more accentuation on the total public use as the significant wellspring of financial progress that is temporarily. Government expenses are essential and basic requirements of each state. This investigation analyzed government consumptions sway on financial progress. In this research time series data is used from1990-2019 in context of Pakistan. The variables which included in the study are economic growth rate as annual percentage of GDP used as dependent variable, while public expenditures on education, public expenditures on health, development expenditure, and Gross capital formation used as independent variables. To examine correlation among government expenses and financial evolution estimation techniques like ARDL model and CUSUM, CUSUM Square tests are utilized. This investigation supports us to comprehend permanent association among public spending and financial evolution. This exploration accomplishes amalgam outcomes, according to these outcomes’ development expenditures are directly and significantly related to economic growth. Moreover, impact of education expenses and gross capital formation on economic growth is positive but insignificant. This study shows that health expenditure has important but undesirable influence on GDP. Moreover, this research suggests that government expenditures can be used in appropriate way; inappropriate use of government expenditures would not be favorable for Pakistan economy.