Safdar Khan | Bond University (original) (raw)

Safdar Khan is currently a PhD candidate in Economics from the Bond University, Australia. He obtained M. Phil. in Economics from Q.A. University, Islamabad and M. A. in Economics from Punjab University, Lahore. He has been Economics Analyst in the State Bank of Pakistan (central bank) since 2003. He is also a member of Euro Area Business Cycle Network (€ABCN).

He has been selected for 3 times by International Monetary Fund (IMF) to participate in her applied policy research programs. He received training respectively in Macroeconomic Modelling & Forecasting, and Theory & Empirics of Growth from IMF regional office Singapore and IMF head Quarters Washington D.C., USA where Neil R Ericson (Senior Economist, Fed) and Prof. Xavier Sala-i-Martin were instructors.

Khan is recipient of prestigious awards as an employee, student and researcher. These awards include ‘Departmental Commitment Award’, ‘Organizational Competence Award’, ‘PVC-research Scholarship’, ‘Dean’s Scholarship’, ‘Murray Award for Educational Citizenship’, ‘Vice Chancellor’s Academic Excellence Award’, Dean’s Academic Excellence Award’, Best Performance in the Subject Award’, ‘Merit Scholarship’ and ‘2011 Publication Award’.

He has published 8 papers in the peer reviewed journals, 5 specialized research sections/chapters in the periodical publication. He has also published 5 working papers and 7 unpublished research projects in different subject areas of Economics. Currently, his PhD research (continued) focuses on the household behavioural Economics including social and cultural Anthropology and social Psychology by utilizing extensive micro level data of more than 25000’s household survey. He is also teaching Macroeconomics, Econometrics, Statistics, Microeconomics, Business Conditions Analysis and Money & Monetary Policy as a teaching fellow/tutor since early 2009. Khan’s research interest is applied policy research, Behavioural Economics, Family Economics, Applied Micro-econometrics, Social and Cultural Anthropology and Social Psychology.

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Papers by Safdar Khan

Journal of Risk and Financial Management, 2021

Fiscal vulnerability, like a contagion, poses a threat to financial sector stability, which can l... more Fiscal vulnerability, like a contagion, poses a threat to financial sector stability, which can lead towards sovereign default. This study aimed to assess fiscal vulnerability to crisis by investigating the Australian economy’s gross public debt, net public debt, and net financial liabilities. We used a threshold regression model and compared results with the baseline deficit–debt framework of analysis. The results of the base model suggested that the economy is fiscally sustainable, and that the primary surplus remains unaffected by increasing levels of public debt. In contrast, the threshold regression model indicated that the increasing level of debt has eroded primary surplus below the threshold level of 30.89% of public debt to GDP. These results need further investigation. Therefore, we modified our basic threshold model to capture budget deficit and surplus as a threshold in response to changes in public debt. The results from the sequential threshold regression model using t...

Two distinct regional associations, SAARC and ASEAN, comprise over seventeen different economies ... more Two distinct regional associations, SAARC and ASEAN, comprise over seventeen different economies of Asia. These economies differ from each other in terms of their age, size and economic performance. However, some comparisons can be drawn between these intra-regional economies on the basis of economic and financial performance for a uniform period of observation, spanning from 1990 to 2003. 1 This chapter discusses the financial sector indicators of the SAARC and ASEAN countries under the framework of macroeconomic performance, with the objective of assessing the level of Pakistan's performance in comparison with these countries. 10.1 SAARC Countries 10.1.1 A Brief Background The South-Asian Association for Regional Cooperation (SAARC) was established on December 8 1985, when its Charter was formally adopted by the Governments of Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. The SAARC region comprises of a population of about 1.43 billion, a total area of 4.1 million square kilometers, and a combined gross domestic product of US$ 4,066 billion. 2 Some of the main objectives of the association as defined in the charter are: a) to accelerate economic growth, social progress and cultural development in the region and to provide all individuals the opportunity to live in dignity and to realize their full potential, and b) to promote active collaboration and mutual assistance in the economic, social, cultural, technical and scientific fields. Regional cooperation serves to promote the bilateral and multilateral relations of the SAARC Member States.

Journal of Asian Economics, 2011

This study investigates the effects of political instability on inflation in Pakistan. Applying t... more This study investigates the effects of political instability on inflation in Pakistan. Applying the Generalized Method of Moments and using data from 1951-2007, we examine this link in two different models. The results of the 'monetary' model suggest that the effects of monetary determinants are rather marginal and that they depend upon the political environment of Pakistan. The 'nonmonetary' model's findings explicitly establish a positive association between measures of political instability and inflation. This is further confirmed on analyses based on interactive dummies that reveal political instability significantly leading to high (above average) inflation.

Energy Economics, 2004

This note examines the different direction of causal relation between energy consumption and econ... more This note examines the different direction of causal relation between energy consumption and economic growth in India. Applying Engle-Granger cointegration approach combined with the standard Granger causality test on Indian data for the period 1950-1996, we find that bi-directional causality exists between energy consumption and economic growth. Further, we apply Johansen multivariate cointegration technique on the different set of variables. The same direction of causality exists between energy consumption and economic growth. This is different from the results obtained in earlier studies.

The objective of this study is to analyze the vulnerability of Pakistan's economy to crisis ... more The objective of this study is to analyze the vulnerability of Pakistan's economy to crisis by evaluating the sustainability of its external and fiscal positions in the recent past. Following the emergence of current account deficits and fiscal imbalances in the last two fiscal years, skepticism on ...

Annals of Tourism Research Empirical Insights, 2021

The aim of this paper is to provide information on how often women direct family expenditures ove... more The aim of this paper is to provide information on how often women direct family expenditures over recreation and travel (R&T), the extent of their empowerment, and the factors that promote it. Bargaining and feminist theory predict that married women are more empowered to make R&T spending decisions if they: are employed, educated, and have additional childrenbut are less empowered if they reside in an extended family, especially if it larger by having more adults and if their mother in law is present. We test, and provide support for these hypotheses, using data from the Pakistan Social and Living Standards Measurement Survey.

The Pakistan Development Review, 2007

The post 9/11 scenario in Pakistan’s economy can readily be identified with a host of positive de... more The post 9/11 scenario in Pakistan’s economy can readily be identified with a host of positive developments. Real GDP growth rates have averaged around 6 percent since 2002, stock market surges have broken all the previous records, there is much more dynamism in the banking industry, capital flows are pouring into the economy, foreign exchange reserves have swelled to record high levels, and poverty has witnessed a declining trend. However, what mars these celebrations since last year is the scepticism of some market commentators on the growing vulnerability of Pakistan’s economy to crisis.1 The main weakness, as widely pointed out, remains the sustainability of current account deficit along with rising fiscal imbalances. A review of empirical literature on the determinants of currency crisis introduces a host of macroeconomic fundamentals broadly based on the predictions of the seminal first- and second-generation models. Although the list of these determinants varies from study to...

This paper estimates a small open economy Dynamic Stochastic General Equilibrium (DSGE) model for... more This paper estimates a small open economy Dynamic Stochastic General Equilibrium (DSGE) model for Pakistan using Bayesian simulation approach. Model setup is based on new Keynesian framework, characterized by nominal rigidity in prices with habit formation in household’s consumption. The core objective is to study whether an estimated small open economy DSGE model provides a realistic behavior about the structure Pakistan economy with fully articulated description of the monetary policy transmission mechanism vis-à-vis domestic firm’s price setting behavior. To do so, we analyze the impulse responses of key macro variables; domestic inflation, imported inflation, output, consumption, interest rate, exchange rate, term of trade to different structural/exogenous shocks. From several interesting results, few are; (a) high inflation in Pakistan do not hit domestic consumption significantly; (b) Central bank of Pakistan responds to high inflation by increasing the policy rate by 100 to 2...

The main objective of this study is to evaluate women empowerment in different contexts of family... more The main objective of this study is to evaluate women empowerment in different contexts of family planning and economic decision making within the household. Further this paper investigates its appropriate determinants sifting through sociology resource control theory and economic bargaining theory by controlling for socio-cultural intervening factors. We examine this empirically by utilizing extensive micro level data information (15,453 households) from 'Pakistan Social and Living Standards Measurement Survey' (PSLM) for the year of 2005-06. Results suggest the presence of highly constrained and largely dichotomous empowerment within the household. Interestingly, we find that the number of children however not the sex of a child relevant in enhancing women's empowerment. Further, the common determinants of empowerment depict varying degree of effectiveness depending on the specific context of empowerment. Moreover, socio-economic, level of education and employment status of a woman depict as effect modifier factors across the empowerment contexts and regions. Furthermore, geographic divisions within Pakistan, significantly explain the contextual empowerment of women. JEL Codes: C42, Z13

The objective of this study is to estimate potential output vis-à-vis output gap for Pakistan's e... more The objective of this study is to estimate potential output vis-à-vis output gap for Pakistan's economy. This paper reviews six commonly used techniques to estimate potential output and from that the output gap. The results suggest that while measures of output gap are not identical they nonetheless do show some degree of association among each other. Therefore, a composite output gap is calculated for 1950 to 2007. The composite output gap depicts that Pakistan economy has been observing a cyclical episode of excess supply corresponding with demand pressures in the period of analysis. Furthermore, evidence suggests that Pakistan economy is currently experiencing rising demand pressures since FY05. Furthermore, these demand pressures show a high degree of correlation with the rising inflation as shown in the temporal correlation between inflation and composite of output gap measures.

Journal of Applied …, Jan 1, 2008

This study analyzes the impact of volatility in government borrowing from central bank (GBCB) on ... more This study analyzes the impact of volatility in government borrowing from central bank (GBCB) on domestic inflation in Pakistan. This paper utilizes Generalized Auto Regressive Conditional Hetroskedasticity (GARCH) model to estimate volatility in GBCB using monthly data from July 1992 to June 2007. The empirical results, based on auto regressive distributed lag (ARDL) with bound testing technique suggest that domestic inflation in Pakistan is related with volatility in government borrowing from central bank in the long run. Furthermore, error correction model (ECM) estimates show that in the short run, inflation is also affected by volatility in GBCB.

The objective of this study is to estimate potential output vis-à-vis output gap for Pakistan's e... more The objective of this study is to estimate potential output vis-à-vis output gap for Pakistan's economy. It applies six commonly-used techniques to estimate potential output and from that the output gap. The results suggest that while these estimates are not the same they nonetheless do show some degree of association among each other. Therefore, a composite output gap is calculated for 1950 to 2007 that depicts that Pakistan economy has been observing a cyclical episode of excess supply followed by excess demand. Evidence further suggests that Pakistan is currently experiencing rising demand pressures since Fiscal Year 2005 and these pressures show a high degree of correlation with inflation.

This paper estimates a small open economy Dynamic Stochastic General Equilibrium (DSGE) model for... more This paper estimates a small open economy Dynamic Stochastic General Equilibrium (DSGE) model for Pakistan using Bayesian simulation approach. Model setup is based on new Keynesian framework, characterized by nominal rigidity in prices with habit formation in household's consumption. The core objective is to study whether an estimated small open economy DSGE model provides a realistic behavior about the structure Pakistan economy with fully articulated description of the monetary policy transmission mechanism vis-à-vis domestic firm's price setting behavior. To do so, we analyze the impulse responses of key macro variables; domestic inflation, imported inflation, output, consumption, interest rate, exchange rate, term of trade to different structural/exogenous shocks. From several interesting results, few are; (a) high inflation in Pakistan do not hit domestic consumption significantly; (b) Central bank of Pakistan responds to high inflation by increasing the policy rate by 100 to 200 bps; (c) exchange rate appreciates in both the cases of high domestic and imported inflation; (d) tight monetary policy stance helps to curb domestic inflation as well as imported inflation but appreciates exchange rate significantly (f) pass through of exchange rate to domestic inflation is very low; finally parameter value of domestic price stickiness shows that around 24 percent domestic firms do not re-optimize their prices which implies averaged price contract is about two quarters. JEL Classifications: E32, E47, E52, F37, F47 for their support, guidance and helpful discussions.

Journal of Risk and Financial Management, 2021

Fiscal vulnerability, like a contagion, poses a threat to financial sector stability, which can l... more Fiscal vulnerability, like a contagion, poses a threat to financial sector stability, which can lead towards sovereign default. This study aimed to assess fiscal vulnerability to crisis by investigating the Australian economy’s gross public debt, net public debt, and net financial liabilities. We used a threshold regression model and compared results with the baseline deficit–debt framework of analysis. The results of the base model suggested that the economy is fiscally sustainable, and that the primary surplus remains unaffected by increasing levels of public debt. In contrast, the threshold regression model indicated that the increasing level of debt has eroded primary surplus below the threshold level of 30.89% of public debt to GDP. These results need further investigation. Therefore, we modified our basic threshold model to capture budget deficit and surplus as a threshold in response to changes in public debt. The results from the sequential threshold regression model using t...

Two distinct regional associations, SAARC and ASEAN, comprise over seventeen different economies ... more Two distinct regional associations, SAARC and ASEAN, comprise over seventeen different economies of Asia. These economies differ from each other in terms of their age, size and economic performance. However, some comparisons can be drawn between these intra-regional economies on the basis of economic and financial performance for a uniform period of observation, spanning from 1990 to 2003. 1 This chapter discusses the financial sector indicators of the SAARC and ASEAN countries under the framework of macroeconomic performance, with the objective of assessing the level of Pakistan's performance in comparison with these countries. 10.1 SAARC Countries 10.1.1 A Brief Background The South-Asian Association for Regional Cooperation (SAARC) was established on December 8 1985, when its Charter was formally adopted by the Governments of Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. The SAARC region comprises of a population of about 1.43 billion, a total area of 4.1 million square kilometers, and a combined gross domestic product of US$ 4,066 billion. 2 Some of the main objectives of the association as defined in the charter are: a) to accelerate economic growth, social progress and cultural development in the region and to provide all individuals the opportunity to live in dignity and to realize their full potential, and b) to promote active collaboration and mutual assistance in the economic, social, cultural, technical and scientific fields. Regional cooperation serves to promote the bilateral and multilateral relations of the SAARC Member States.

Journal of Asian Economics, 2011

This study investigates the effects of political instability on inflation in Pakistan. Applying t... more This study investigates the effects of political instability on inflation in Pakistan. Applying the Generalized Method of Moments and using data from 1951-2007, we examine this link in two different models. The results of the 'monetary' model suggest that the effects of monetary determinants are rather marginal and that they depend upon the political environment of Pakistan. The 'nonmonetary' model's findings explicitly establish a positive association between measures of political instability and inflation. This is further confirmed on analyses based on interactive dummies that reveal political instability significantly leading to high (above average) inflation.

Energy Economics, 2004

This note examines the different direction of causal relation between energy consumption and econ... more This note examines the different direction of causal relation between energy consumption and economic growth in India. Applying Engle-Granger cointegration approach combined with the standard Granger causality test on Indian data for the period 1950-1996, we find that bi-directional causality exists between energy consumption and economic growth. Further, we apply Johansen multivariate cointegration technique on the different set of variables. The same direction of causality exists between energy consumption and economic growth. This is different from the results obtained in earlier studies.

The objective of this study is to analyze the vulnerability of Pakistan's economy to crisis ... more The objective of this study is to analyze the vulnerability of Pakistan's economy to crisis by evaluating the sustainability of its external and fiscal positions in the recent past. Following the emergence of current account deficits and fiscal imbalances in the last two fiscal years, skepticism on ...

Annals of Tourism Research Empirical Insights, 2021

The aim of this paper is to provide information on how often women direct family expenditures ove... more The aim of this paper is to provide information on how often women direct family expenditures over recreation and travel (R&T), the extent of their empowerment, and the factors that promote it. Bargaining and feminist theory predict that married women are more empowered to make R&T spending decisions if they: are employed, educated, and have additional childrenbut are less empowered if they reside in an extended family, especially if it larger by having more adults and if their mother in law is present. We test, and provide support for these hypotheses, using data from the Pakistan Social and Living Standards Measurement Survey.

The Pakistan Development Review, 2007

The post 9/11 scenario in Pakistan’s economy can readily be identified with a host of positive de... more The post 9/11 scenario in Pakistan’s economy can readily be identified with a host of positive developments. Real GDP growth rates have averaged around 6 percent since 2002, stock market surges have broken all the previous records, there is much more dynamism in the banking industry, capital flows are pouring into the economy, foreign exchange reserves have swelled to record high levels, and poverty has witnessed a declining trend. However, what mars these celebrations since last year is the scepticism of some market commentators on the growing vulnerability of Pakistan’s economy to crisis.1 The main weakness, as widely pointed out, remains the sustainability of current account deficit along with rising fiscal imbalances. A review of empirical literature on the determinants of currency crisis introduces a host of macroeconomic fundamentals broadly based on the predictions of the seminal first- and second-generation models. Although the list of these determinants varies from study to...

This paper estimates a small open economy Dynamic Stochastic General Equilibrium (DSGE) model for... more This paper estimates a small open economy Dynamic Stochastic General Equilibrium (DSGE) model for Pakistan using Bayesian simulation approach. Model setup is based on new Keynesian framework, characterized by nominal rigidity in prices with habit formation in household’s consumption. The core objective is to study whether an estimated small open economy DSGE model provides a realistic behavior about the structure Pakistan economy with fully articulated description of the monetary policy transmission mechanism vis-à-vis domestic firm’s price setting behavior. To do so, we analyze the impulse responses of key macro variables; domestic inflation, imported inflation, output, consumption, interest rate, exchange rate, term of trade to different structural/exogenous shocks. From several interesting results, few are; (a) high inflation in Pakistan do not hit domestic consumption significantly; (b) Central bank of Pakistan responds to high inflation by increasing the policy rate by 100 to 2...

The main objective of this study is to evaluate women empowerment in different contexts of family... more The main objective of this study is to evaluate women empowerment in different contexts of family planning and economic decision making within the household. Further this paper investigates its appropriate determinants sifting through sociology resource control theory and economic bargaining theory by controlling for socio-cultural intervening factors. We examine this empirically by utilizing extensive micro level data information (15,453 households) from 'Pakistan Social and Living Standards Measurement Survey' (PSLM) for the year of 2005-06. Results suggest the presence of highly constrained and largely dichotomous empowerment within the household. Interestingly, we find that the number of children however not the sex of a child relevant in enhancing women's empowerment. Further, the common determinants of empowerment depict varying degree of effectiveness depending on the specific context of empowerment. Moreover, socio-economic, level of education and employment status of a woman depict as effect modifier factors across the empowerment contexts and regions. Furthermore, geographic divisions within Pakistan, significantly explain the contextual empowerment of women. JEL Codes: C42, Z13

The objective of this study is to estimate potential output vis-à-vis output gap for Pakistan's e... more The objective of this study is to estimate potential output vis-à-vis output gap for Pakistan's economy. This paper reviews six commonly used techniques to estimate potential output and from that the output gap. The results suggest that while measures of output gap are not identical they nonetheless do show some degree of association among each other. Therefore, a composite output gap is calculated for 1950 to 2007. The composite output gap depicts that Pakistan economy has been observing a cyclical episode of excess supply corresponding with demand pressures in the period of analysis. Furthermore, evidence suggests that Pakistan economy is currently experiencing rising demand pressures since FY05. Furthermore, these demand pressures show a high degree of correlation with the rising inflation as shown in the temporal correlation between inflation and composite of output gap measures.

Journal of Applied …, Jan 1, 2008

This study analyzes the impact of volatility in government borrowing from central bank (GBCB) on ... more This study analyzes the impact of volatility in government borrowing from central bank (GBCB) on domestic inflation in Pakistan. This paper utilizes Generalized Auto Regressive Conditional Hetroskedasticity (GARCH) model to estimate volatility in GBCB using monthly data from July 1992 to June 2007. The empirical results, based on auto regressive distributed lag (ARDL) with bound testing technique suggest that domestic inflation in Pakistan is related with volatility in government borrowing from central bank in the long run. Furthermore, error correction model (ECM) estimates show that in the short run, inflation is also affected by volatility in GBCB.

The objective of this study is to estimate potential output vis-à-vis output gap for Pakistan's e... more The objective of this study is to estimate potential output vis-à-vis output gap for Pakistan's economy. It applies six commonly-used techniques to estimate potential output and from that the output gap. The results suggest that while these estimates are not the same they nonetheless do show some degree of association among each other. Therefore, a composite output gap is calculated for 1950 to 2007 that depicts that Pakistan economy has been observing a cyclical episode of excess supply followed by excess demand. Evidence further suggests that Pakistan is currently experiencing rising demand pressures since Fiscal Year 2005 and these pressures show a high degree of correlation with inflation.

This paper estimates a small open economy Dynamic Stochastic General Equilibrium (DSGE) model for... more This paper estimates a small open economy Dynamic Stochastic General Equilibrium (DSGE) model for Pakistan using Bayesian simulation approach. Model setup is based on new Keynesian framework, characterized by nominal rigidity in prices with habit formation in household's consumption. The core objective is to study whether an estimated small open economy DSGE model provides a realistic behavior about the structure Pakistan economy with fully articulated description of the monetary policy transmission mechanism vis-à-vis domestic firm's price setting behavior. To do so, we analyze the impulse responses of key macro variables; domestic inflation, imported inflation, output, consumption, interest rate, exchange rate, term of trade to different structural/exogenous shocks. From several interesting results, few are; (a) high inflation in Pakistan do not hit domestic consumption significantly; (b) Central bank of Pakistan responds to high inflation by increasing the policy rate by 100 to 200 bps; (c) exchange rate appreciates in both the cases of high domestic and imported inflation; (d) tight monetary policy stance helps to curb domestic inflation as well as imported inflation but appreciates exchange rate significantly (f) pass through of exchange rate to domestic inflation is very low; finally parameter value of domestic price stickiness shows that around 24 percent domestic firms do not re-optimize their prices which implies averaged price contract is about two quarters. JEL Classifications: E32, E47, E52, F37, F47 for their support, guidance and helpful discussions.