Inclusive Growth and Macroeconomic Situations in South Asia: An Empirical Analysis

Abstract

Inclusive growth is the main target of development economics, although developing countries have accelerated their overall economic growth but with less inclusiveness. This article has observed the impact of macroeconomic situation on inclusive growth in South Asia (Pakistan, India, Sri Lanka and Bangladesh) over the period of 1991 to 2014. This article has used panel autoregressive distributed lag (ARDL), the unit root issue of the variables is checked with the help of Levin, Lin & Chu t*, ADF - Fisher Chi-square, Im, Pesaran and Shin W-stat and PP-Fisher Chi-square unit root tests. The results of the study show that per capita income and level of education are reducing inclusiveness in South Asia. The study points out that macroeconomic situations, population growth and female labor force are promoting inclusive growth. The study recommends that for higher inclusive growth, South Asian countries would enhance level education, per capita income, female share in labor markets and control population growth with stable macroeconomic situations.