IMPACT OF GOVERNMENT EXPENDITURES ON ECONOMIC GROWTH IN PAKISTAN
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Abstract
This study focused on the impact of government expenditures on economic growth by using the ARDL technique for the period of 1990-2020. Results show that government expenditures will positively affect economic growth across a variety of channels. Government investment can boost economic activity by providing public goods, which are a key component of aggregate demand. Furthermore, ensuring fair income allocation may affect economic development by the mechanism of taxation and transfer payments. Government spending aids in maintaining law and order in the region, which is needed for long-term economic development. Furthermore, government expenditures on constructive projects such as physical and human infrastructure can increase productivity, and government spending through its relationship with the private sector can increase production directly or indirectly (Asghar et al 2012).