gender differential paper IJCRB

ijcrb.webs.com
JUNE 2011
INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS VOL 3, NO 2
taken in million US $. The source of data is annual reports of State Bank of Pakistan (SBP).
To check the impact of total imports, chemicals imports, food imports, machinery impost and
other miscellaneous imports on GDP following models are used.
Model 1:
n
n
GDPt
= ∑ α
iTI
t−i
+ ∑ β
iGDPt
−i
+ µ
1t
i=
1
i=
1
n
n
TI
t
= ∑ α
iTI
t−i
+ ∑ β
iGDPt
−i
+ µ
2t
i=
1
i=
1
Model 2:
n
n
GDPt
= ∑ α
iCHM
t−i
+ ∑ β
iGDPt
−i
+ η1
t
i=
1
i=
1
n
n
CHM
t
= ∑ α
iCHM
t−i
+ ∑ β
iGDPt
−i
+ η
2t
i=
1
i=
1
Model 3:
n
n
GDPt
= ∑ α
i
Ft
−i
+ ∑ β
iGDPt
−i
+ λ1
t
i=
1
i=
1
n
n
Ft
= ∑ α
i
Ft
−i
+ ∑ β
iGDPt
−i
+ λ2t
i=
1
i=
1
Model 4:
n
n
GDPt
= ∑ α
iMCH
t−i
+ ∑ β
iGDPt
−i
+ ε1
t
i=
1
i=
1
n
n
MCH
t
= ∑ α
iMCH
t−i
+ ∑ β
iGDPt
−i
+ ε
2t
i=
1
i=
1
Model 5:
n
n
GDPt
= ∑ α
iMISt−i
+ ∑ β
iGDPt
−i
+ ν
1t
i=
1
i=
1
n
n
MISt
= ∑ α
iMISt−i
+ ∑ β
iGDPt
−i
+ ν
2t
i=
1
i=
1
4. Methodology
To study the causal relationship, the well known Ganger causality test has been applied. This
test procedure assumes that the information relevant to the prediction of respective variables
is contained solely in the time series data on the variables. More generally, since the future
cannot predict the past, if variable X (Granger) causes Y, then changes in X should precede
changes in Y (Gujrati, 2004; Granger, 1981; Greene, 2003).
This means if forecast of variable Y using both the lagged values of Y and lagged value of
some other variable X, is superior to forecasts obtained using past values of Y alone, then X
is said to Ganger cause Y. In the same way, if the lagged values of Y can improve the
forecasts of X in the presence of past values of X, then Y is said to Granger cause X.
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