Impact of Fiscal Policy on GDP Growth Rate: a Case of Pakistan

Fiscal policy plays a key role in the economic growth of every country. In this article, we investigate the impact of fiscal policy on economic growth in case of Pakistan by using time series data from 1981-2016. For analysis, we built a model of gross national expenditure and applied autoregressive distributed lag model for empirical analysis this study on the base of bound test value. The result indicates that gross national expenditure had a positive relationship with the growth rate. Moreover, industry value added had a positive and significant relation with growth rate because since countries with reliable industrial sector results in more development and growth.