Nadeem Hanif | Iqra University IU (original) (raw)

Papers by Nadeem Hanif

IO: Empirical Studies of Firms & Markets eJournal, 2017

This research has investigated the sustainability of growth of nonfinancial firms in case of Paki... more This research has investigated the sustainability of growth of nonfinancial firms in case of Pakistan. For this purpose, explanatory variable of earnings per share and total assets turnover were used as controlling factors and liquidity, size and cash flows were used as independent variables. Balanced panel of 27 firms with 24 annual time dimensions has been used from 1988 to 2011. Model specification criteria were in favour of pooled least squares but due to heterogeneity of firms, fixed effect model was opted for. The results of research were robust against internal growth but not robust to sustainable growth indicating that, in case of Pakistan, the leverage impact, which is the key difference between internal growth and sustainable growth might be playing some unexplained role for the growth of nonfinancial firms. For steady, regular and internal growth, liquidity and cash generation ability are playing a significant role but fail to support growth in the long run and in a susta...

The surge in global commodity prices in 2007-08 sent an inflationary shock across the world. The ... more The surge in global commodity prices in 2007-08 sent an inflationary shock across the world. The collapse in global prices in 2014 resulted in significant disinflation in many countries and even deflation in some countries. We have explored the linkages between global commodity prices' fluctuations and inflation in a small open economy, Pakistan. Global price fluctuations are found to be dominant source of inflation in Pakistan during July 1992 to June 2014. Food inflation and overall inflation in Pakistan is linked to changes in international food prices. Increase in global oil price results in non-food and administered prices' inflation in Pakistan. For core inflation, changes in global prices of metal and cotton matter most. Global commodity prices' changes impact overall inflation in Pakistan rather quickly compared to impact of changes in monetary aggregates. Core inflation takes longer to respond to all types of shocks, including global prices' fluctuations.

We estimate standard errors (S.Es.) of month on month and year on year inflation in Pakistan base... more We estimate standard errors (S.Es.) of month on month and year on year inflation in Pakistan based on data for the period of July 2001 to June 2010 using stochastic approach as well as extended stochastic approach to index numbers. We develop a mechanism to estimate S.E. of period average headline inflation using these approaches. This mechanism is then applied to estimate S.Es. of 12-month average inflation in Pakistan for July 2003 to June 2010. The systematic changes in the relative prices of different groups in the CPI basket for Pakistan are also estimated. The highest (positive) relative price inflation occurred in 'food, beverages and tobacco' group and lowest (negative) for 'recreation and entertainment' group, during FY01 to FY10.

MPRA Paper, Dec 31, 2010

The answer to the question what is the Mean of a given set of magnitudes cannot in general be fou... more The answer to the question what is the Mean of a given set of magnitudes cannot in general be found, unless there is given also the object for the sake of which a mean value is required. There are as many kinds of average as many purposes; and we may almost say in the matter of prices as many purposes as many writers." Edgeworth (1888)

RePEc: Research Papers in Economics, 2019

RePEc: Research Papers in Economics, 2017

We compare performance of modified HP filter, wavelet analysis and empirical mode decomposition. ... more We compare performance of modified HP filter, wavelet analysis and empirical mode decomposition. Our simulation study results suggest that modified HP filter performs better for an overall time series. However, in the middle (of time series) wavelet analysis performs best. Wavelet analysis based filtering has highest ‘end points bias (EPB)’. However, it performs better when we extrapolate the subject time series to lower the EPB. Study based on observed data of real income, investment and consumption shows that the autoregressive properties and multivariate analytics of cyclical components depend upon filtering technique.

RePEc: Research Papers in Economics, Nov 1, 2016

We assess impact of monetary policy actions upon inflation in a country while considering changes... more We assess impact of monetary policy actions upon inflation in a country while considering changes in global commodity prices in rich data environment. We apply Factor Augmented Bayesian Structural Vector Autoregression (FABSVAR) methodology of Bernanke et al (2005) upon Pakistan's monthly data for July 1992-June 2015. Unlike Bernanke et al (2005), we combine variables of similar nature in groups to extract factors. We think putting all sorts of variables in one group impairs the factor extraction. Moreover, rather than working only with the response of variable of interest (inflation in this study) to shocks in factors under consideration (which, consist of different interest rates, monetary aggregates, exchange rates in this study) we propose use of eigenvector to obtain Impulse Response Functions (IRFs) of shock to individual variables in a factor. We find significant and desired impact of monetary policy decisions upon inflation in Pakistan. Administered prices, however, are found to have no response to interest rate changes in the country, which is understandable. By analyzing IRFs of inflation in Pakistan to shocks in interest rate we do not observe any price puzzle. It is simply because we consider the relevant variables omitted in previous studies reporting price puzzle in Pakistan.

This study compares the forecasting performance of various models of inflation for a developing c... more This study compares the forecasting performance of various models of inflation for a developing country estimated over the period of last two decades. Performance is measured at different forecast horizons (up to 24 months ahead) and for different time periods when inflation is low, high and moderate (in the context of Pakistan economy). Performance is considered relative to the best amongst the three usually used forecast evaluation benchmarks – random walk, ARIMA and AR(1) models. We find forecasts from ARDL modeling and certain combinations of point forecasts better than the best benchmark model, the random walk model, as well as structural VAR and Bayesian VAR models for forecasting inflation for Pakistan. For low inflation regime, upper trimmed average of the point forecasts out performs any model based forecasting for short period of time. For longer period, use of an ARDL model is the best choice. For moderate inflation regime different ways to average various models’ point f...

The Pakistan Development Review, 2020

We have empirically examined the role of monetary aggregate(s) vis-à-vis short-term interest rate... more We have empirically examined the role of monetary aggregate(s) vis-à-vis short-term interest rate as monetary policy instruments, and the impact of State Bank of Pakistan’s transformation into the latter on their relative effectiveness in terms of inflation in Pakistan. Using indicators of ‘persistent changes’ in the underlying behaviours of variables of interest, we found that broad money consistently explains inflation in (i) monetary (ii) transitory and (iii) interest rate regimes. Though its role has receded while moving from the transition to the interest rate regime, the interest rate instrument seems to be positively related to inflation, a phenomenon commonly known as price puzzle. In light of these findings, we recommend that the role of money should not be completely de-emphasised. JEL Classification: E31, E52. Keywords: Monetary Policy Instruments, Price Puzzle, ARDL, Pakistan

Journal of Central Banking Theory and Practice, 2020

Existing measures of core inflation ignore a part of ‘should be’ the core inflation. Exclusion ba... more Existing measures of core inflation ignore a part of ‘should be’ the core inflation. Exclusion based measures ‘exclude’ a part of persistent inflation inherently existing in the excluded part whereas filter based measures ‘filter-out’ the cyclical part also rather than the irregular component only. This study proposes a new idea to define and measure core inflation – noise free inflation or denoised inflation. As against considering only trend to define core inflation, this study proposes using cyclical component also to be part of core inflation. If core inflation is to be useful, for monetary policy making, as an indicator of underlying inflation, it has to include demand related component of inflation associated with current economic cycle. By using wavelet analysis approach to decompose seasonally adjusted price index into noise, cyclical component and trend, we estimate a denoised inflation series for Pakistan for the period July 1992 to June 2017. Since denoised inflation pass...

The Pakistan Development Review, 2012

The answer to the question what is the mean of a given set of magnitudes cannot in general be fou... more The answer to the question what is the mean of a given set of magnitudes cannot in general be found, unless there is given also the object for the sake of which a mean value is required. There are as many kinds of average as many purposes; and we may almost say in the matter of prices as many purposes as many writers." Edgeworth (1888). We estimate standard errors (S.Es.) of month on month and year on year inflation in Pakistan based on data for the period of July 2001 to June 2010 using the stochastic approach as well as extended stochastic approach to index numbers. We develop a mechanism to estimate S.E. of period average headline inflation (rate) using these approaches. This mechanism is then applied to estimate S.Es. of 12-month average rate of inflation in Pakistan for July 2003 to June 2010. The systematic changes in the relative prices of different groups in the CPI basket for Pakistan are also estimated. The highest (positive) relative price inflation occurred in 'food, beverages and tobacco' group and the lowest (negative) for 'recreation and entertainment' group, during fiscal years 2001 to 2010.

JISR management and social sciences & economics, 2010

Continuous growth in Islamic finance calls for an in-depth study of the framework in which the mo... more Continuous growth in Islamic finance calls for an in-depth study of the framework in which the monetary policy maker (i.e., the central bank) performs its functions. Central banks in Muslim countries are using various instruments for monetary policy purpose including interest rate. As a result, Islamic Financial Institutions (IFIs) are facing issues in benchmarking the price of financial instruments. Acceptable solution to benchmarking lies in the presence of a real economic activity in the base of any proposal and its feasibility for business performance when put against conventional banking. This paper presents empirical evidence of statistical equivalence of nominal GDP growth rate and official interest rate for ‘advanced,’ ‘all,’ and some Muslim countries. We propose nominal GDP growth rate as benchmark for pricing domestic financial transactions of IFIs as well as for pricing external bilateral/multilateral loans. The paper also suggests nominal income targeting as monetary pol...

JISR management and social sciences & economics, 2012

Generally, inflation refers to a reduction in purchasing power per unit of money and is considere... more Generally, inflation refers to a reduction in purchasing power per unit of money and is considered a consequence of negative trends in monetary activity. As a number of factors may lead to inflation in an economy, this study attempts to measure the relative significance of structural shocks in explaining infiation. Monthly time series data is used on key macroeconomic variables of Pakistan from July 1992 to June 2011, and structural vector auto-regressions (SVAR) to understand the role ofsupply and demand shocks as key drivers of infiation. Long- run restrictions according to standard aggregate demand and aggregate supply framework are employed to identify structural shocks in the system. The results indicate that inflation follows a sluggish time path in response to supply shock as compared to demand shock of nominal nature. Specifically, around 75 percent oflong-run impact ofsupply shock on inflation is realized over a period of one year horizon as compared with 90 percent for dem...

JISR management and social sciences & economics, 2013

In Pakistan, where the competition is intense in almost all industries, professionals spend more ... more In Pakistan, where the competition is intense in almost all industries, professionals spend more time at work than official duty hours in order to survive the rapidly changing environment. This has resulted in numerous compromises on other important fronts like cutting off from family and friends. It is assumed that work/life imbalance prevails more in developing nations with immense work pressures. To keep up pace with the growing demands of organizations and increasing responsibilities, one often neglects any or all strands of socializing. This gives rise to an imbalance which erupts as work/life conflicts for an individual and affects one’s satisfaction in work and other activities. The purpose of this research is to determine the impact of work/life balance on employees of a commercial bank (in different branches) in Pakistan where men and women focus more on professional life and compromise on other dimensions of life which are: personal, family, and social. The survey included...

Journal of Independent Studies and Research-Management, Social Sciences and Economics, 2012

Arby (2008) quarterised the production side of annual GDP, and its subsectors, for 1972 to 2005 b... more Arby (2008) quarterised the production side of annual GDP, and its subsectors, for 1972 to 2005 based on constant prices of 1999-2000 as well as on current prices. This study provides quarterly estimates of (sectoral and overall) gross domestic production in Pakistan during 1999-2000 to 2009-2010 based on constant prices of 1999-2000 as well as on current prices. Seasonality in quarterly gross domestic product in Pakistan mainly arises from agriculture. Furthermore, the study also provides estimates of various components of expenditures side of the GDP for 1972-1973 to 2009-2010 for the first time as far as we know.

Food inflation hurts poor more than rich as poor spend higher proportion of their income on food ... more Food inflation hurts poor more than rich as poor spend higher proportion of their income on food items as compared to rich. Higher global food and crude oil prices in 2008 resulted in higher (than historical average) food inflation in Pakistan. Global food inflation caused food inflation in Pakistan. However, food inflation diffusion has been lower as compared to non-food inflation in Pakistan. Food inflation volatility in Pakistan was found to be half of that observed in the world. Compared to global food inflation persistence, there is no evidence of food inflation persistence in Pakistan. However, within the food group, most of the goods, which were manufactured, exhibited inflation persistence. With the help of comparison of food inflation with wage increases for labour (after 2008 global commodity prices shock), the poor (labour class) was found to be at disadvantage.

Applied Economics, 2014

In business cycle research, smoothing data is an essential step in that it can influence the exte... more In business cycle research, smoothing data is an essential step in that it can influence the extent to which model-generated moments stand up to their empirical counterparts. To demonstrate this idea, we compare the results of McDermott"s (1997) modified HP-filter with the conventional HPfilter on the properties of simulated and actual macroeconomic series. Our simulations suggest that the modified HP-filter proxies better the true cyclical series. This is true for temporally aggregated data as well. Furthermore, we find that although the autoregressive properties of the smoothed observed series are immune to smoothing procedures, the multivariate analysis is not. As a result, we recommend and hence provide series-, country-and frequency specific smoothing parameters.