Link Between Political and Economic Stability: A Case Study of Pakistan

Abstract

Present research aims at investigating the relationship between political and economic stability in Pakistan. Using secondary data over the period of 1987 to 2022, ARDL bound testing technique is employed to obtain short-run and long-run estimates of the regression model. It is found that political stability and economic stability have a positive and significant relationship. The study also establishes that increase in labor force, trade openness and real discount rate help to achieve economic stability while government expenditure negatively impact economic stability. Based on these conclusions, study proposes important policy recommendations including prudent fiscal management, labor market policies for workforce growth, efforts to promote political stability, cautious monetary policy management, and continued promotion of trade openness to foster stability in economic growth.