banking sector and poverty

The Casual Nexus of Banking Sector Development and Poverty Reduction in Pakistan

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Banking Development and Poverty

Table of Contents

CHAPTER 1: INTRODUCTION....................................................................................................1

1.1. Overview...........................................................................................................................1

1.2. Problem Statement............................................................................................................1

1.3. Background of the Research.............................................................................................2

1.3.1. Significance of the Research..........................................................................................3

1.3.2. Objective of the Research..............................................................................................4

1.4. Outline of the Research.....................................................................................................4

CHAPTER 2: LITERATURE REVIEW.........................................................................................6

2.1. Introduction.......................................................................................................................6

2.2. Economic Growth.............................................................................................................6

2.3. Financial Development.....................................................................................................7

2.4. Banking Sector Development...........................................................................................8

2.5. Poverty Reduction...........................................................................................................10

2.6. Relationship between Banking Sector development and Poverty Reduction.................10

2.7. Research Hypothesis.......................................................................................................11

CHAPTER 3: METHODOLOGY.................................................................................................12

3.1. Methods of Data Collection............................................................................................12

3.2. Sampling Technique.......................................................................................................12

3.3. Sample Size.....................................................................................................................13

3.4. Statistical Technique.......................................................................................................13

3.5. Research Model...............................................................................................................13

CHAPTER FOUR: ANALYSIS AND DISCUSSION.................................................................15

4.1. Overview.............................................................................................................................15

4.2. Time Series Analysis..........................................................................................................15

4.3. Output from Eviews............................................................................................................15

4.4. Interpretation 1....................................................................................................................17

4.5. Interpretation 2....................................................................................................................19

REFERENCES..............................................................................................................................23

Banking Development and Poverty

Banking Development and Poverty1

CHAPTER 1: INTRODUCTION

1.1. Overview

Poverty in Pakistan has almost always been a major macroeconomic issue and it has

attracted many scholars for their researches. In the recent years, there is a substantial body of

relationship between financial development and poverty reduction is established. And the

literature found is quite conclusive for poverty reduction in improving the banking sector. Some

former studies have given a certain threshold to this argument of economic development, while

others have studied the dynamics of poverty reduction. To study the banking sector development

for poverty reduction, a huge amount of data is used like cross-section data analysis (Yu

Ho&Odhiambo, 2011, p.103).

According to Uddin et al., 2013, p.406), the influence of improvement in finance sector

has ambiguous and uncertain results on poverty reduction in developing countries (Pradhan,

2010, p.114). While comparing poverty reduction with growth model, poverty reduction has

more leverage and significance in economic growth. The standpoint that economic progress can

lead to poverty reduction is not necessary. It implies that the economic growth result in

improving poor lives quality, but it does not.

1.2. Problem Statement

Although there have been an extensive researches, studies and models that discussed the

impact of banking sector development on poverty reduction, but the results were not certain.

However, the topic needs modifications. The banking sector has been playing a vital role in

encouraging the economic growth which in turn leads to poverty reduction in Pakistan. Poverty


in Pakistan is one of the most researched areas after education and health. There are theories and

models to study the impact of baking sector development on Poverty reduction. In late 90’s the

reforms of financial sector initiated which eventually developed a feasible and satisfactory

environment for poor and middle class had options in getting credits (Yu-Ho&Odhiambo, 2011,

p.105).

1.3. Background of the Research

While examining the banking sector development, it is essential to understand the phases

of financial sector development. As financial sector development is an effective tool for

economy growth of a country. Many studies have provided that a well-functioning financial

system that allocates resources mobilizes savings and calculates risk management is a

contribution to economic progression. In addition to economic growth, the financial services are

more in demand for the financial advancement. Some suggests an indirect bi-directional formal

relationship between economic growth and banking sector development. On the contrary, it is

not argued to that the financial development would have an impact on poverty reduction

(Inoune&Hamori, 2010, p.1).

Poverty reduction, on the contrary, has been the subject of many researchers’ area of

study. In Pakistan it has been a foremost and a major issue, as Pakistan is also included in the list

third world countries. It has been a serious problem as it affects the global economy as well.

Government of Pakistan has taken some robust initiatives to struggle with poverty and the

officials are concerned about the poverty reduction in Pakistan (Shafiq et al., 2012, p.366). Some

researchers have studied the impact of financial development on poverty reduction by applying


the autoregressive lag model (ARDL) for a longer period to control the variables like agricultural

growth, inflation and manufacturing (Inoue &Hamori, 2012; Ellahi, 2011; Uddin et al., 2013).

1.3.1. Significance of the Research

This research is significant is examining the financial deepening for poverty reduction.

There is an interrelation between banking sector development and poverty reduction that can by

analyzed. Other studies have been providing the relationship and impact of financial

development on poverty reduction, while this study specifically signifies the relationship of

banking sector development, which is a biggest component of financial development, with

poverty reduction (Khan et al., 2011). Furthermore, there is a significant effect of income

inequality on the poverty rate which is verified. Here, this research examines the relationship

between the banking sector development and poverty reduction. Growth is directly dependent on

the financial sector development and poverty depends on growth, here we check the direct

relationship of banking sector development with poverty reduction. For Banking sector, different

components are applied as variables, deposits money banks assets to GDP, central bank assets to

GDP, bank deposits and concentration (Khan et al., 2011). To reduce poverty, it is important to

improve banking sector development and increase financial development in Pakistan which

directly leads to economic growth. Financial sector contain the institutions in economy, retail,

formal and informal outlets, and wholesales that offer financial institutes (Khan et al., 2011,

p.59).


1.3.2. Objective of the Research

To study the relationship of financial development on economic growth

To study the significance of banking sector development on financial development

To study the relationship of financial development with poverty reduction

To study the interrelation of Banking sector development with poverty reduction

1.4. Outline of the Research

Chapter 1 is the contextual background of the research led by aims and objectives of the

research, along with problem statement and significance. This chapter provides general

understanding of the subject, what the research was projected at, what evaluates the need of

research on the issue and how the research can be used as a source in future, etc.

Chapter 2 is a comprehensive review of the former literature and recent research on the

topic. The basic themes, models, theories and issues are discussed here coupled with essential

research findings to shed light on what is already known about the issue and what are the

portions to take up future research and investigation. This chapter also includes the conceptual

framework for the study which strongly emphasizes its base whereas the hypothesis has also

been created supported by literature review.

Chapter 3 is a research methodology i.e. research philosophy, research design, approach,

sampling techniques, type of investigation, data collection and analysis technique, etc. This

chapter moreover comprises the limitations, hypothesis and variables in the study. The chapter

broadens the generalizability of the study by offering a brief review of the research procedure

and by recognizing the limitations.


Chapter 4 is a data analysis including tabular and graphical representation of the data for

simplifying and understanding the research while discussing the results and its explanations as in

the literature review and hypothesis. Quantitative and qualitative analysis of the results have

been developed under this chapter to provide the reader with highlights of the research, its

findings and the significance of its findings.

Lastly, Chapter 5 concludes the research with sole findings and provides the

recommendations and suggestions for the research. This chapter is the core of the complete

research and sums up the main factors of the research.


CHAPTER 2: LITERATURE REVIEW

2.1. Introduction

The relationship of Banking sector development and poverty reduction in Pakistan has an

extensive and inconclusive empirical and theoretical literature (Uddin et al., 2013, p.305).

Ahamada and Coulibaly (2011) instigated as how financial development is beneficial for

economic growth volatility. The impact of increasing the rate of volatility in emerging

economies is reducing the rate of poverty. Although the augment in economies increases the

demand of financial services but influences the financial growth. Furthermore, a recipient

account might make them reasonable for bank loan and hence it expands the credit market size

(Sami, 2013, p.503). Financial sector is an essential growth aspect and it plays role in the form of

fast payment services, improved remittance services and many other branches in several fields

like business that dwindle transaction cost and goods between household, hence it can help to

promote economic growth (Khan et al., 2011, p.60).

2.2. Economic Growth

The increase of per capita gross domestic product (GDP) or other measurements of

aggregate income is referred as economic growth. To evaluate economic growth, the rate of

change in real GDP is calculated. Economic growth is only considered to be the production of

goods and services. Economic growth is both; positive and negative. Negative economic growth

is when the economy is shrinking. It is the economic recession or depression (Lewis, 2013, p.23).

Domestic resources are considered to be the significant component for economic growth

and reduce poverty. There are no second thoughts on the role that financial development and


banking sector are playing in improvement of economy. Consequently a well-functioning and

influential banking sector is effective on economic growth. According to (Shahbaz,

Afza&Shabbir, 2013, p.60), Pakistan’s financial sector has changed its dynamics after grasping

the importance of strong banking and effective financial markets. Economic growth is optimized

by financial development through mobilization and investment activities and this positive

relationship amongst financial development and economic growth reduces poverty through

growth improving impact.

As Shahbaz&Rehman (2013) research concludes that economic growth and poverty

reduction are present in Pakistan. The increase in financial development is because of the high

demand in financial services and it is said to have a demand-side impact. The utilization of

domestic resources is dynamic for economic growth through the financial development. Due to

low economy in Pakistan, Income inequality and poverty were elated in the decades of 1980’s

and 1990’s. Whereas; Pakistan is recorded to be have the second highest economic growth rate in

2005, in South Asia. According to Uddin, Kyophilavong&Sydee (2012, p. 306), financial

development has an indirect impact on the living standards of poor. According to World Bank

(2004), the average economic growth Pakistan made was 3% in 1980’s and 1.2% in 1990’s. The

sluggish growth steadied in the later 1990’s that led to an increase in poverty incident.

2.3. Financial Development

Financial sector development established because of an important mechanism as that is

beneficial for economic growth. The financial development has a crucial part to play with in

alleviation of poverty for developing countries like Pakistan (Ellahi, 2011). Financial

development is associated with the financial instability where poor are not benefitted from the


greater availability of credit. Many researches have outlined the direct relation of financial

growth with poverty while the indirect relationship with economic growth (Inoue &Hamori,

2010, p.1).

Financial development is a huge and multidimensional concept and consists of a

potentially significant phenomenon for a long-run economic growth. Numerous studies have

bolstered the interrelationship between financial advancement and poverty experimentally and

theoretically (Sami, 2013; Shahbaz&Rahman, 2013; Ellahi 2011). The empirical evidence

received from these studies varying from country to country, includes industry-level analysis,

each country analysis and broad cross-country comparison. It highlights that there is a vital role

that financial development is playing in economic growth. On the contrary, financial

development is essential and basic requirement for economic growth. Due to the implications

that are not accurate, it affects the other factors of socio-economic development in the economy

(Pradhan, 2010, p.115). By experimenting and evaluating, the financial institutes and exerting

corporate control can stimulate growth and increase the capital accumulation that would result in

ultimate poverty reduction (Khan et al., 2011, p.60).

The financial institutes are basically the organizations that are in-charge of investment,

savings, loans, assets, pensions, deposits, salaries etc. In Pakistan, the instances of which are

public/private sector banks, foreign banks, development financial institutes (DFIs), investment

banks, microfinance banks, specialized banks and Islamic banks (Ibrar, 2013).

2.4. Banking Sector Development

The banking sector in Pakistan is continually emerging from sliding interest rate reign to

skin spreads while pressurizing profits. Alongside healthy transactions and increased non-


markup revenue has stabilized production. The division’s related pricing compared to KSE is

over-playing the fears of spreads. It has been noticed that the current development that provides

the perfect current interest rate ().

Pakistan has implemented successful financial reforms with the help of banking sector in

the last decade and the banking sector has gone through some experimental and fundamental

changes in three phases. The first reform was a World Bank initiative and supported by Banking

Sector Adjustment Loan (BSAL). The reforms are reported to have attained a complete new

environment for the banking sector.

More investment, more production and more production first increase the growth level

then decrease the poverty level; it is indirect impact of banking sector on poverty reduction

(Inuoe&Hamori, 2010, p.1). As Noman and Uddin (2011) investigated the casual nexus between

remittances, banking sector development and GDP in four South Asian of countries (Pakistan,

India, Bangladesh, and Sri Lanka) depending on individual country time series analysis and

studied that the banking sector Granger remittances inflow in Pakistan and India.

Banking sector development program is implemented in Pakistan on terms of 35-year

maturity. According to World Bank (2004), Pakistan has achieved progress in in banking sector

reform, after its own program launch in 1997. The overall program assessment and its findings

were effective in order to stabilize the macro economy while providing the essential financial

sector recovery. According to Imran & Khalil (2012, 568), apart from the conventional banking,

microfinance is another network with which the financial sector provide loans for low-level

businesses or to micro organizations that end up destroying firms’ growth.


2.5. Poverty Reduction

Poverty is referred as the capacity to buy the product or services depending on

consumption and income on assets or material possessions. In 1990’s poverty reduction and the

poorest have been the purpose of attraction at international summit according to Canadian

International Development Agency (CIDA). Reduction of poverty can be determined in order to

provide credit to businesses of financial intermediaries by creating more jobs through industry

growth (Imran & Khalil, 2012, p.568).

Pakistan has been a developing economy considering the poverty trends based on cross-

sectional datasets. Poverty dynamics can be classified as chronic poverty and transitory

(Arif&Farooq, 2011, p.1). According to Shafiq et al. (2012), Poverty has been the biggest of

issues in Pakistan. His study is about the relation between poverty alleviation and economic

growth where the time period of 1978 to 2010 was analyzed. His research suggested that there is

a negative impact on poverty but it contributes to poverty reduction in a long-run. There is a

close relationship between finance and growth and that nexus is contributing as an emerging

body that analyses the effects of financial development on both; poverty conditions and income

distribution. A few researches have explored the association between financial growth embedded

in poverty ratio using cross country data and private credit exist for more than 70 developing

countries. The findings resulted in negative association with the poverty ratio after optimizing

the income, inflation rate and the income share of top 10% (Inoue &Hamori, 2010, p.2).

2.6. Relationship between Banking Sector development and Poverty Reduction

In the last decade, there are a number of researches that established an indirect nexus

between financial development and poverty with the help of government intervention.


Government intervention in order to advance financial policies especially credit market policies

that are in favor of appropriate on subsidized rates of interest, which implies that financial

liberation, needs to be adjusted. Because of the economic benefits, we can trickle down the to a

lesser income group and eventually reduce poverty (Khan et al., 2011, p.60).

The economic literature specializing in the casual nexus between the poverty reduction

and financial system establishes the belief that most of the researchers are actually worried about

poverty and so and so that they study the impact of financial development on poverty reduction.

The direct effect is essay to understand and study but the indirect change is not that easy to go

through for instance different channels might be affecting poverty reduction like credit, savings,

income inequality and insurance services (Dhrifi, 2014, p.1).

The relationship has been widely researched and discussed as there is a lot of discussion

available about the relationship of financial liberation and economic growth. According to the

literature, a robust relationship has been observed. It is also evident due to the financial policies;

countries with open financial policies have the potential to grow faster than that of restricted

financial policies (Munir, Chaudhry&Akhtar, 2013, p.227).

2.7. Research Hypothesis

H1: Banking development has direct relation with poverty reduction

H2: There is long term equilibrium between banking sector development and poverty

reduction in Pakistan.


CHAPTER 3: METHODOLOGY

3.1. Methods of Data Collection

In general there are two different types of data collection method i.e. (1) Primary Data

collection and (2) Secondary Data Collection. The primary data collection method is referred as

the collection of first-hand information which has not been collected before by any researcher or

publications. Some important tools for primary data collection are (a) Interviews, (b) Surveys, (c)

Focus group and (d) Observations. On the other hand, secondary data collection refers to that

information which has already been researched and is known as second hand information. Some

techniques of collecting secondary data collection are through research publications, research

papers, company’s annual reports, economic survey reports and newsletters (Galvao et.al, 2013,

p. 307).

The current research has adapted secondary data collection method because of the nature

of the study being conducted. The data will be collected from World Bank and economic survey

website of Pakistan. The basic advantage of secondary data is that it allows the researcher in

collecting meaningful information which can be large thus providing authentic and reliable data

for carrying out the analysis.

3.2. Sampling Technique

Time series is defined as an arrangement of data points, particularly involving successive

measurement developed through different time intervals. The time series analysis includes

different methods and processes for the purpose of examining time series data to get meaningful

statistical data and other attributes of the data. Moreover, time series forecasting is the utilization


of a specific model in order to assume future values that are dependent on previously observed

values. However, regression analysis is usually used to test different theories pertaining to the

fact that present values of independent time series has a direct impact on the present value of a

different time series. This is not known as time series analysis, as time series aims on comparing

single time series values and multiple dependent time series at various different points(Chavez

and Davison, 2012, p.111).

3.3. Sample Size

The sample collected was from World Bank and Economic survey of Pakistan. Data was

collected annually from 1980-2010, thus having 30 observations in total.

3.4. Statistical Technique

In a situation where the research variable in long term relation of interest are assumed

stationary, the usual practice is to de-trend the series and then to de-trend the series to a specific

model as autoregressive distributed lag (ARDL) or stationary distributed lag. The regressors may

incorporate lagged values pertaining to dependent variable and lagged and current values of

more than two explanatory variables. The ARDL model enables the researcher in measure the

effect due to the change in policy variable (Ritchie, 2013, p. 36).

3.5. Research Model

The research model is based on Autoregressive Distributed Lag (ARDL) or Stationary

Distributed Lag. The equation for ARDL is:


Δ LPOV t=c1+δ1 trend+π1 LPOV t−1+π2 LDCP t−1+∑i=1

p

θi Δ LPOV t−i+∑i=1

p

φi Δ LDCPt−i+u1t

Δ LDCP t=c2+δ2 trend+π 1 LDCPt−1+π2 LPOV t−1 +∑i=1

p

θi Δ LDCPt−i+∑i=1

p

φi Δ LPOV t−i+u2 t

Where,

Δ = First difference operator

LDCP= domestic credit to private sector

LPOV= poverty reduction

c1 , c2= constant

δ1 , δ2 = coefficient on trend term

= coefficient on the lagged level of the dependent and independent variable

θi = coefficient on the lagged dependent variable

φ i =coefficient on the lagged independent variable

u1 , u2= error term

P = signifies the maximum lag length


CHAPTER FOUR: ANALYSIS AND DISCUSSION

4.1. Overview

Chapter four of this study comprises of analysis and findings from secondary data

collected. The data is collected from World Bank and economic survey website of Pakistan. The

researcher has utilized meaningful information for the purpose of research. The study aimed to

understand and evaluate the impact of banking sector development on poverty reduction.

4.2. Time Series Analysis

For the purpose of this research data from 1980-2010 was collected annually from World

Bank and Economic Survey of Pakistan. Data was analysed using statistical software E-views

that was used to test various variables. These tests were useful in forecasting future values based

on the past data. As research variable in long term relation are stationary, autoregressive

distributed lag (ARDL), model is used after de-trending of variables.

4.3. Output from Eviews

Null Hypothesis: PAK_PER has a unit root

Exogenous: Constant

Lag Length: 0 (Automatic - based on SIC, maxlag=5)

t-Statistic Prob.*

Augmented Dickey-Fuller test statistic -0.534955 0.8675


Test critical values: 1% level -3.737853

5% level -2.991878

10% level -2.635542

*MacKinnon (1996) one-sided p-values.

Augmented Dickey-Fuller Test Equation

Dependent Variable: D(PAK_PER)

Method: Least Squares

Date: 04/17/14 Time: 16:30

Sample (adjusted): 1987 2010

Included observations: 24 after adjustments

Variable CoefficientStd. Error t-Statistic Prob.

PAK_PER(-1) -0.038304 0.071603 -0.534955 0.5980

C 20.97676 27.01839 0.776388 0.4458

R-squared 0.012841 Mean dependent var 6.649167

Adjusted R-squared -0.032030 S.D. dependent var 17.16841

S.E. of regression 17.44119 Akaike info criterion 8.635202

Sum squared resid 6692.294 Schwarz criterion 8.733373

Log likelihood -101.6224 Hannan-Quinn criter. 8.661247

F-statistic 0.286177 Durbin-Watson stat 2.515456

Prob(F-statistic) 0.598047


Null Hypothesis: Ho: ϴ = 0

(I.e. the needs to be different to make it stationary)

Alternative Hypothesis: H1: ϴ < 0

(I.e. the data is stationary and does not need to be differenced)

From the results of E-views regression analysis, it can be observed that null is coefficient

on PAK_PER (-1) is negative or approximately zero, which mean that there is a unit root.

Alternative hypothesis is less than zero, which means no unit root.

4.4. Interpretation 1

From the above table obtained from E-views, represent the results obtained from

augmented Dickey-Fuller Statistics. To test the hypothesis, level of significance α = 0.05 is

considered. Results from Augmented Dickey Fuller Statistics are -0.5439, which is greater than

critical value -2.9918, at 5% level of significance. Therefore, we cannot reject the presence of

unit root, confirmed by approximate p-value for z (t) = 0.8675. To reject the null at 10 %,

p<=0.10 (test statistic should be less than -2.6355), to reject the null at 5% (test statistic should

be less than-2.9918) p<=0.05, and to reject the null at 1 %,( test statistic should be less than-

3.7378) p<=0.01.

Null Hypothesis: D(PAK_PER) has a unit root


Exogenous: Constant

Lag Length: 0 (Automatic - based on SIC, maxlag=5)

t-Statistic Prob.*

Augmented Dickey-Fuller test statistic -6.399386 0.0000

Test critical values: 1% level -3.752946

5% level -2.998064

10% level -2.638752

*MacKinnon (1996) one-sided p-values.

Augmented Dickey-Fuller Test Equation

Dependent Variable: D(PAK_PER,2)

Method: Least Squares

Date: 04/17/14 Time: 16:30



Variable CoefficientStd. Error t-Statistic Prob.

D(PAK_PER(-1)) -1.362859 0.212967 -6.399386 0.0000

C 9.694089 3.862668 2.509687 0.0203

R-squared 0.661029 Mean dependent var -0.743043

Adjusted R-squared 0.644887 S.D. dependent var 28.17923


S.E. of regression 16.79238 Akaike info criterion 8.562669

Sum squared resid 5921.667 Schwarz criterion 8.661408

Log likelihood -96.47070 Hannan-Quinn criter. 8.587502

F-statistic 40.95214 Durbin-Watson stat 1.909316

Prob(F-statistic) 0.000002

Null Hypothesis: Ho: ϴ = 0

(I.e. the needs to be different to make it stationary)

Alternative Hypothesis: H1: ϴ < 0

(I.e. the data is stationary and does not need to be differenced)

Hypothesis is tested using the results obtained from E-views regression analysis; it can be

observed that null is coefficient should be zero, which means that there is a unit root. Alternative

hypothesis is less than zero, which means no unit root.

4.5. Interpretation 2

From the above table obtained from E-views, represent the results obtained from

augmented Dickey-Fuller Statistics. To test the hypothesis, level of significance α = 0.05 is

considered. Results from Augmented Dickey Fuller Statistics are -6.3993, which is lower than

critical value -2.9980, at 5% level of significance. Therefore, we cannot accept the presence of

unit root, confirmed by approximate p-value for z (t) = 0.000. To reject the null at 10 %,

p<=0.10 (test statistic should be less than -2.6387), to reject the null at 5% (test statistic should


be less than-2.9980) p<=0.05, and to reject the null at 1 %,( test statistic should be less than-

3.7529) p<=0.01.

Vector Autoregression Estimates

Date: 04/17/14 Time: 16:31



Standard errors in ( ) & t-statistics in [ ]

PAK_PER PAK_BANK

PAK_PER(-1) 0.584032 0.012276

(0.19862) (0.02320)

[ 2.94041] [ 0.52924]

PAK_PER(-2) 0.370196 -0.009493

(0.20690) (0.02416)

[ 1.78922] [-0.39286]

PAK_BANK(-1) 5.036928 1.038300

(1.83511) (0.21431)

[ 2.74475] [ 4.84494]

PAK_BANK(-2) -2.983277 -0.512719

(1.74801) (0.20413)

[-1.70667] [-2.51167]


C -24.10537 10.74400

(37.3688) (4.36397)

[-0.64507] [ 2.46198]

R-squared 0.924959 0.607259

Adj. R-squared 0.908283 0.519983

Sum sq. resids 4172.620 56.90537

S.E. equation 15.22538 1.778035

F-statistic 55.46732 6.957925

Log likelihood -92.44485 -43.05338

Akaike AIC 8.473465 4.178555

Schwarz SC 8.720311 4.425402

Mean dependent 383.9813 25.01565

S.D. dependent 50.27408 2.566327

Determinant resid covariance (dof

adj.) 732.7634

Determinant resid covariance 448.8003

Log likelihood -135.4968

Akaike information criterion 12.65190

Schwarz criterion 13.14559

Considering the fact that longer lags were utilized in Dickey-Fuller regression, likelihood

of vector auto regression having longer lags is higher. The results obtained from auto regression


estimates, describes that the coefficients on ∆st−1 and f pt−1 in both equations are statistically

significant at the 10% level and that the fit for the fp t equation is much better than the fit for the

∆st equation. Output obtained from E-views for auto regression estimates also mentions the

coefficient standard errors and t-statistics, summary also displays R-squared measures for each

equation (which are valid because each equation estimates are obtained from least square).


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banking sector and poverty

Documents

dynamics of poverty

poverty reduction102

banking sector development82

finance sector

reforms of financial

economic growth result

economic growth62

economic progress