Abstract This research aims to test the fiscal dominance hypothesis for Pakistan through a bivariate structural vector auto regression (SVAR) specification, covering time period 1977 – 2016. This study employs real primary deficit (non interest government expenditures minus total revenues) and real primary liabilities (sum of monetary base and domestic public debt) as indicators of fiscal measures and monetary policy respectively. A structural VAR is retrieved both for entire sample period and four sub periods (1977 – 1986, 1987 – 1997, 1998 – 2008, and 2009 – 2016). This study identifies the presence of fiscal dominance for the entire sample period and the sub period from 1987 – 2008. The estimates reveal an interesting phenomenon that fiscal dominance is significant in the elected regimes and weaker in the presence of military regimes in Pakistan. From a policy perspective, this research suggests increased autonomy of central bank to achieve long term price stability and reduced administration costs to ensure efficient democratic regime in Pakistan.

中文翻译：

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在巴基斯坦的结构性 VAR 规范中测试财政优势假设

摘要 本研究旨在通过双变量结构向量自动回归 (SVAR) 规范测试巴基斯坦的财政优势假设，涵盖 1977 年至 2016 年的时间段。本研究采用实际主要赤字（非利息政府支出减去总收入）和实际主要负债（货币基础和国内公共债务的总和）分别作为财政措施和货币政策的指标。对整个样本期和四个子期（1977 – 1986、1987 – 1997、1998 – 2008 和 2009 – 2016）都检索了结构 VAR。本研究确定了整个样本期间和 1987 年至 2008 年子期间的财政主导地位。估计揭示了一个有趣的现象，即财政主导地位在民选政权中显着，而在巴基斯坦存在军事政权时则较弱。从政策角度来看，这项研究表明中央银行的自主权增加以实现长期价格稳定并降低管理成本以确保巴基斯坦有效的民主制度。