Pakistan Journal of Applied Economics

1-23

Authors: Mohammad AKBAR

Export earnings are of immense importance for a third world country like Pakistan, especially in the given grim economic situation and alarmingly low foreign exchange position. Since the early seventies, Pakistan has been incurring a terms of trade deficit of more than 3 percent a year. Pakistan's share in world trade has remained under 0.2 per cent throughout the period under consideration. Subsequent governments have placed increased emphasis on the expansion of export earnings. In the light of this growing awareness about the importance of exports in a developing country like Pakistan, an in-depth analysis of the export performance in a historical perspective is essential for any meaningful future planning in this regard. The purpose of this paper is to examine whether and to what extent, low share of Pakistan's export in world trade reflects the lack of its international competitiveness. This is achieved by using Constant Market Share Analysis.

37-47

Authors: Eatzaz AHMAD & Muhammad IDREES*

For the past two decades or so, the manufacturing sector of Pakistan has been facing an energy crisis in one form or the other. While in the mid-1970s the prices of petroleum products increased significantly, the period of 1980s was marked by severe shortages of electricity supply, which had to be managed by load-shedding. Since energy is an important factor of production, I the shortage of energy, especially electricity, in the recent past has been a major hindrance to the growth of the manufacturing sector in Pakistan. The power shortage crisis of the 1980s was overcome partly by replacing consumption quotas with rationing through prohibitive price increases and partly by successfully attracting direct foreign investment in the power sector. With the introduction of private power producers, though the supply bottlenecks are removed, the price of electricity is expected to rise further in the light of the high procurement price agreed with the independent power producers. Nevertheless, it was the oil price shocks in the mid-1970s coupled with the movement to protect the environment that aroused interest in energy economics. Following the worldwide trend, several studies have also been conducted in Pakistan to investigate prospects of substituting energy for other factor inputs.

65-77

Authors: Muhammad Aslam KHAN* & Muhammad Farooq ARBY** & Muhammad Amin Khan LODHI**

The objective of the paper is to estimate a separate demand function for component of M2 in Pakistan, by using co-integration and error-correction techniques, based on the annual data set for the period of 1971-72 to 1998-99. Results show that currency in circulation and demand deposits are inelastic to interest rates and exchange rates, but highly elastic to income. On the contrary, quasi money is elastic to interest rates and exchange rates ,and inelastic to income changes.