Abstract

In this paper, we evaluated the impulse response of agriculture, industrial and services sector growth to their own shocks and shocks to other macroeconomic indicators determining their growth. Amisano and Giannini (1997) AB model in structural vector auto regression was used for conducting the analysis. Objective was to check sustainability of shocks in relevant determinants of sectoral growth in Pakistan. Results show that agriculture sector growth impulse response to its shock and shock to gross national expenditures was positive. However, inflation and remittances shock affected agriculture sector growth negatively while effect of permanent crop land shock was both positive and negative. Industrial sector results show that external debt, industrial sector growth impulse response to rest of the variables was both positive and negative. External debt shock however, caused industrial sector growth to rise. Same kind of results are obtained for services sector growth impulse to its own shock and shocks to other relevant determinants.

Keyword(s)

growthagricultureindustryServicesTVPSVAR