This paper is an attempt to get fresh estimates of the underground economy and tax evasion in Pakistan. Various methodologies have been used to measure the size of the underground economy, i.e., the monetary, fiscal, and labour market approaches in particular. The monetary approach has strong...

The variations in exchange rate play a vital role in the determination of trade balance. Volatile exchange rate shatters the investor’s and trader’s confidence, and slows down the process of trade, which results in slower growth. In this paper, other market instabilities—such as GDP growth...

Controlling prices is one of the major tasks for the macroeconomic policy-makers. The recent oil price hike that shifted the policy towards biofuels and some natural calamities increased food prices around the world. This paper analyses the demand- and supply-side factors that affect food prices...

Using Computable General Equilibrium Model, this paper assesses the impact of import liberalisation on macro aggregates and on the welfare of households. It uses benchmark data from Social Accounting Matrix for the year 1989-90 and simulates the impact of (i) removal of quota restrictions on...

Throughout Pakistan’s history, policy has sought to promote exports through government support and incentives. The government machinery is geared to export promotion especially through direct and indirect subsidies. Surprisingly, these policies have been continued without serious examination....

Rise in the underground economy creates problems for the policy-makers to formulate economic policies, especially the monetary and fiscal policies. It is found that if there was no tax evasion, budgets balance might have been zero and positive for some years and we would not have needed to...