Material Well-being triggered by Macro-Economic Variables: Evidence from South Asia

Abstract

The present study aimed at analyzing the material well-being (WB) triggered by macroeconomic variables for selected countries i.e., Pakistan, India and Bangladesh. The study incorporated three separate operational models to observe their influence on WB of each selected country. For the sake of study time series dataset were collected for the time period of 1983 to 2015. Countries selection was made on the basis of IMF ranking and World Bank ranking for the year 2016. This ranking was based on the PCI of nations. First of all selected macroeconomic data were tested by applying unit root test i.e., Augmented Dickey-Fuller (ADF). Findings suggested that Autoregressive Distributed Lag Model (ARDL) as the most appropriate technique for the estimation of the long-run (LR) and short run (SR) outputs. Results of study showed that in the LR material WB could attribute positive impact on government expenditures, foreign direct investment (FDI) and remittances. On the other hand, there was a decline in material WB due to inflation and unemployment in the LR.