Efficacy of Macroeconomic Policies to Achieve Inclusive Growth: Evidence from Developing Countries

By: Zakia Batool & Arshad Ali Bhatti

This paper aims to analyse the interactive role of fiscal and monetary policies in promoting inclusive growth. In this attempt, we use a panel data of 51 developing countries for the period 1995-2017 and employ state-of-the-art panel data estimation methods. The paper concludes that expansionary fiscal and monetary policies both affect economic inclusiveness in the developing region. However, it is observed that high expenditures in developing countries, which lead to debt crises, not only directly affect economic inclusiveness but also reduce the effectiveness of monetary policy. Therefore, the governments in these countries may consider cutting their spending. Thus, an increase in the money supply with a low to median level of government expenditure is a favourable policy option. 

Publication Link: http://58.27.197.147/index.php/fjes/article/view/269

Small Farm Holder’s Wellbeing: Evidence From Punjab (Pakistan)

by: Muhammad Arshad Sakhani, Abdul Jabbar, & Arshad Ali Bhatti 

The study investigates the impact of income diversification on the well-being of small farm holders in Punjab, the most populated and agrarian province of Pakistan. It benchmarks the levels of well-being of small farm holders who opt income diversification (off-farm) with those who remain exclusively indulged in agricultural farm activities(onlyfarm). The data of 1607 farm families are retrieved from the PSLM (2015–16) survey to construct a fully representative well-being index using Principal Component Analysis (PCA). Empirical analysis is obtained through the treatment effect model. The results of the treatment effect show that income diversification has positively significant impact on household well-being and cast noticeable improvements in well-being of off-farm strata as compared to that of only-farm income earners. Furthermore, net saving, access to credit, dependence ratio, and farm size are the critical factors that enable land assets to have a favorable and substantial impact on both welfare and income diversification. Importantly improved education drives small farmers’ decision to diversify their sources of income.

Publication Link: https://journals.au.edu.pk/ojs/index.php/jbe/article/view/431