Understanding the Drivers of Inflation Volatility of Pakistan
DOI:
https://doi.org/10.56976/rjsi.v5i1.75Keywords:
Inflation, inflation volatility, Pakistan, ARCH, GARCH.Abstract
This paper focuses on the inflation problem about a worldwide issue. The aim of this study is to discuss the technique over the data collected for the last thirty-eight months. This study explores the significance of inflation and inflation volatility. The results were also compared with the estimates for effectiveness and volatility by the ARCH/GARCH technique. The entire model is statistically significant. There is a positive relationship between money supply and exchange rate with current inflation. The Granger test is applied to examine the causality connecting inflation and inflation volatility. The result shows that inflation will be increased in the future in Pakistan. Future studies can be extended by considering more factors to obtain more precision to control the inflation volatility in Pakistan.
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Copyright (c) 2023 Arshad Hameed, Jannat Latieef, Naureen Riaz, Iram Sarwar, Maryam Fatima
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