ECONOMIC MIX OF EXPENDITURE, TAXATION AND GROWTH: A CASE OF PAKISTAN

Abstract

The purpose of this research analysis is to look at the influence of government expenditure and taxation on Pakistan's economic expansion. The research paper used annual time-series data to investigate the economy of Pakistan from 1979 through 2020. The pooled OLS analysis approach was used to perform the data analysis. As a result, it is found that Government’s non- development spending and overall taxation either direct taxes or indirect taxes have a statistically significant and positive impact on economic expansion in while development spending and increasing population has a negative influence on economic expansion, moreover, trade liberalization has statistically insignificant impact on economic growth. Furthermore, the policy implications for the impact of government taxation and expenditures on Pakistan's economic growth include the fact that if policymakers incorporate a policy of government spending funds on the expansion of the real investment sector, Pakistan's economy will be highly benefited