HomeDespre ECTAEventsPolitica editorialaTrimite un articolParteneri / link-uri utileArchiveAbonamentContact

ISSN 1841-8678   (print)
ISSN 1844-0029   (online)


Archive ECTAP

Note: for the period 1994-2003 the archive of the magazine will not be available online

Supplements ECTAP

If you cannot open the pdf file you need Adobe Reader.
download Adobe Reader

Creative Commons License

Theoretical and Applied Economics
No. 2 / 2022 (631), Summer

Linear and nonlinear effect of exchange rate on inflation in Pakistan

Kashif MUNIR
Al Qasimia University, Sharjah, United Arab Emirates

Abstract. This study analyzes linear and nonlinear impact of exchange rate on inflation in Pakistan. Time series analysis is performed under ARDL and nonlinear ARDL framework to analyze that how in long and short run inflation get affected by exchange rate. Time series data (monthly) of Pakistan from 1980 (January) to 2019 (April) is utilized for analysis. ARDL model shows that real effective exchange rate has negative and significant impact on inflation in the long run, however, nonlinear ARDL (NARDL) model found that exchange rate deprecation increases inflation in long run, while appreciation decreases inflation in long run. The NARDL model proves that exchange rate has nonlinear effects on inflation in Pakistan. One-way causality exists from inflation to exchange rate as well as to appreciation of exchange rate in Pakistan. Government has to formulate policies to stabilize the exchange rate, while strong financial and capital markets are required to minimize risk of exchange rate to protect the international competitiveness.

Keywords: exchange rate, inflation, ARDL, NARDL, Pakistan.

Download the full article:  


Open acces




The Economicity. The Epistemic Landscape, Marin Dinu, 2016


ISSN 1841-8678 (ediția print) / ISSN 1844-0029 (ediția online)
© Copyright Asociația Generală a Economiștilor din România (AGER) / General Association of Economists From Romania  (GAER)
Redacția: 010702, București, Calea Griviței nr. 21, sector 1, E-mail:

© 2006-2023 AGER