THE IMPACT OF TERRORISM ON ECONOMIC GROWTH IN PAKISTAN: AN EMPIRICAL ANALYSIS

Abstract

The goal of the study to explore the impact of terrorism on economic growth by utilizing time series data from 1974 to 2015, the period for which consistent data is available in case of Pakistan. In this study, Autoregressive Distributed Lag (ARDL) model employed to conduct an enquiry of cointegration and short-run dynamics among the dependent and independent variables of the model. The empirical results of this model assure that there is the existence of cointegration and short-run dynamics among the terrorism and economic growth in case of Pakistan. The results of this analysis show that an upward shift in the terrorist activity will downward shift in economic growth and insignificant relationship in both long-run and short-run analysis of the model. Thus, it is advised that government should plan such type of policy through which terrorism reduce and economic growth becomes stable.