Impact of Taxation on Inflation

7/24/2019 Impact of Taxation on Inflation

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DOES NET TAXES & TRADE OPENNESS PRODUCE A SIGNIFICANTEFFECT ON INFLATION: EVIDENCE FROM PAKISTAN

Submitted to

Mr. Syed Tahseena!ed

Faculty of

Mana"e#en$ S%en%es

In the fulfillment of course

Resear%h Me$h'ds

By

Danial Anwar (6517)

danialanwer!"#$mailcom

Faroo% Abdul &auf (7!')

faroo%ar%"#$mailcom

uhammad Fara* (715+)

fara*,amil"6#$mailcom

uhammad &afay (67-)

rafay1''+#$mailcom

Syed .ohaib Ali (6"!5)

syed/*ohaibali#hotmailcom

M(A

S)rn" *+,-

ABSTRACT
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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Does Net Taxes & Trade Openness produce a Significant effect on Inflation: Evidence from Pakistan

Time series Data from World ank

This study examines the efects o Net Taxes and Trade openness on

Ination rate using time series data o Pakistan rom 1980 to 2010 o the

or!d "ank# $ resu!t sho%s that there is a signi&cant re!ationship 'et%een

Net Taxes on productand Ination rate( there is a!so ainsigni&cant

re!ationship 'et%een Trade )penness and Ination rate# *stimation mode! is

a'!e to predict 9+, accurate# -o it is recommended that i Po!iticians %ant to

decrease the ination they must increase the Tax on product 'ecause

increasing in Taxes on product produce a signi&cant efect o decrease the

ination rate o Pakistan#

Key Words: Net Taxes, Trade openness and Infation.

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,. INTRODUCTION

So any de0eloin$ 2ations and unde0eloed nations li3e 4a3istan ha0e tried to lower down intensity

of inflation which aears %uite re0ailin$ and well3nown amon$ these countries here a sons and

causes for this ha0e remained focus to different interretations deendin$ uon the secifications

demo$rahics and re$ional rofiles of different countries thus the ercetions re$ardin$ ha0in$ a

concei0able solution lac3s concurrency 8nfortunately 4a3istan is also a 0ictim of this not only inflation

rates are bein$ beyond realistic limits but also a 0ast ma,ority who fall rey to this belon$s to literate

cate$ory

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Infation

Taxes

Trade penness

his study e9amined the effect of inflation rate trade oenness and net ta9es he ob,ecti0e of this

study is to in0esti$ate which of these three 0ariables ha0e a si$nificant relationshi effect on inflation

rate and with the hel of this study it will be easier to imro0e inflation rate in 4a3istan once the

imortant 0ariables are identified Inflation in 4a3istan o0er the last -+ years had an erratic trend For

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research urose annual time series data is collected as samle he selection of these 0ariables is

done 3eein$ in consideration the imortance of each 0ariable on the basis of theoretical bac3$round

and the ast studies conducted in this asect

2. LITERATURE REVIEW:

!e "o#nd so $#%& 'iterat#re (&i%& s&o(s t&e re'ations&ip )et(een t&e infation

rate, trade and taxes. *o$e T&eoreti%a' )a%+gro#nd 'iterat#re re-ie(s are gi-en

&ere #nder

*., The're$%a (a%/"r'0nd:

rade oenness wor3s as the tool which is wor3in$ a$ainst monooly It also offered that

it is the 0erbosity of the ad0anced technolo$y scientific concets and administrati0e

s3ills It also corresonds and creates a coalition between monetary and fiscal olicies

(Af*al et al !+1-)1he lin3 between oenness and $rowth 0olatility indeed conditioned

by the e9tent to which a country has di0ersified its e9ort base It is also stated that the

di0ersification lays an imortant role which defend economy from detrimental imact of

idiosyncratic $lobal shoc3s on 0olatility (:addad et al !+1!)!

he o0erall re0enue effect of inflation on the ta9 base deends on a number of factors

Inflation can increase the ta9 base (this is articularly li3ely to haen if the scoe for

deductin$ interest e9ense is limited) In the absence of limitations on the deduction of

nominal interest inflation can erode the ta9 base articularly if there is free access to

credit and if much interest income escaes ta9ation as ta9ayers arran$e their affairs so

as to eliminate instances of o0er ta9ation and ma9imi*e oortunities for under ta9ation

1 *ee /e"eren%e, at Page 32


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;n a more abstract le0el inflation can be seen as destroyin$ the inte$rity of all forms of

accountin$ includin$ ta9 accountin$ based on historic costs Inflation ma3es it

imossible to add or subtract amounts such as receits e9enses in0entory balances and

so on stated at historic costs and occurrin$ on different dates It is as if these numbers

were e9ressed in different currencies At hi$h le0els of inflation the ta9 base becomes

0irtually meanin$less

*.* E#)r%a S$0des:

'edstein 19853exa$ine t&e re'ations&ip )et(een t&e infation, taxation

and $onetar po'i% in * states #sing ti$e series data o" 18 ears, period

"ro$ 1960 1978. aria)'es t&at are #sed in 'iterat#re are infation rate, tax

rate, s&are pri%e and non residentia' xed in-est$ent. /egression $ode' is

#se to ana'sis t&e infation rate. T&e res#'t s&o(n t&at tax r#'es and infation

pro-ides a (a o" )ot& red#%es t&e rate o" infation and in%reasing t&e gro(t&

o" %apita' sto%+. It s&o(s t&at taxes &a-e signi%ant negati-e ee%t on

infation in :$eri%a.

;'eane20004de-e'op a re'ations&ip )et(een infation and taxation. Ti$e

series data o" -ario#s %o#ntries &a-e )een #sed o" 27ears period "ro$ 1970

1997. T&ree dierent tpe o" data is #sed "or ana'P, de)t.

/es#'t s&o(s t&at Tax re-en#e gi-es t&e negati-e i$pa%t on infation.



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?a+aria 20105 exa$ine t&e re'ations&ip )et(een trade openness and

infation in Pa+istan #sing t&e ti$e series data "or 60 ears period "ro$ 1947

to 2007. Infation, export and i$port are #sing as t&e -aria)'e in t&is

'iterat#re. t&er %ontro' -aria)'es (&i%& are #sed "or t&is exa$ination are

$one s#pp', s%a' de%it, ex%&ange rate depre%iations, "oreign infation,

ter$s o" trade, "oreign de)t and de$o%ra% @orre'ation test is app'ied on

data. *ensiti-it ana'sis is a'so app'ied on data. T&e res#'ts s&o(s t&at

Pa+istanAs e%ono$ &as a %onsidera)'e degree o" openness to "oreign trade,

t&e do$esti% pri%e 'e-e' %annot re$ain i$$#ne to externa' s&o%+s. It is a'so

s&o( t&at t&e trade openness &as a signi%ant positi-e ee%t on infation in

Pa+istan.

Ta&ir B. 20106exa$ines t&e /o$erAs &pot&esis in Pa+istan t&at infation is

'o(er in s$a'' and open e%ono$ies, #sing ti$e series data (&i%& %o-ers t&e

period "ro$ 1960 to 2007, -e -aria)'es #sed t&e )#dget de%it ;>, =>P,

Cx%&ange /ate C/, Infation @PI, Trade penness T.T&e @ointegration

Test &as app'ied on data. T&e st#d s#pports t&e res#'ts o)tained ) /o$erAs

1993 de$onstrating t&at t&ere is a negati-e re'ations&ip )et(een trade

openness and infation and (&ate-er its %a#se, t&at greater openness to

trade is asso%iated (it& 'o(er infation s&o#'d pro-ide so$e %o$"ort to t&ose

(&o "ear t&at trade 'i)era'i


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Pato'i et a'. 20127, exa$ine t&e re'ations&ip )et(een tax re-en#e and

infation in Pa+istan. T&e ti$e series data "or t&e period o" 2000D2010 &as

)een #sed in t&e paper. T&e are #sing dire%t taxes, indire%t taxes, tota' taxes

and %&anges in infation in Pa+istan as -aria)'es. T&e ana'sis &as )een done

) "e( statisti%a' gears 'i+e %orre'ation, regression and signi%an%e test "or

error ) t&e "a%tors o" &pot&esis. T&e st#d s&o(s t&at t&e positi-e

re'ations&ip )et(een infation and taxes. It is s#ggested t&at t&e s%a' po'i%

p'anners and t&e )#dget $a+ers s&o#'d e$p&asi


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t&e sta)i'it (e #se t&e #nit root test.8nit roots were erformed usin$ the Au$mented Dic3ey

Fuller (ADF) statistic In the model there is a chance of trend (non stationary) wo different models ha0e

been considered while erformin$ tests he model with constant !"# assumes that there are no trends in

the le0els of the data such that difference series ha0e *ero mean


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(&i%& is -er (ea+ trend and t&is is a)'e to #se "or "ore%ast. aria)'e T &a-e no

trend at %onstant and &a-e trend at %onstant trend on 'e-e' data )#t at t&e rst

dieren%e trend is not present in T -aria)'e t&at (e #se in o#r $ode'. aria)'e TG

&a-e trend at %onstant and %onstant trend on 'e-e' data )#t at t&e rst dieren%e

trend is not present in TG -aria)'e t&at (e a'so #se in o#r $ode'. *o t&is test s&o(s

t&at t&e data is approx sta)'e and (e #se t&is data in o#r $ode' "or predi%tion.

No( (e see t&e grap& o" a'' -aria)'es at 'e-e' and 1st>ieren%e.

Gra)h -.*3

Va%iabl

!At L!#!l 1"tDi$!%!'!

EI

2.5

3.0

3.5

4.0

4.5

5.0

5.5

1980 1985 1990 1995 2000 2005 2010

LIF

.00

.04

.08

.12

.16

.20

1980 1985 1990 1995 2000 2005 2010

D(LIF)

9 *ee :ppendix :, Page 41 43

Page | 9


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T

.28

.30

.32

.34

.36

.38

.40

1980 1985 1990 1995 2000 2005 2010

TO

-.06

-.04

-.02

.00

.02

.04

.06

1980 1985 1990 1995 2000 2005 2010

D(TO)

TG

2

4

6

8

10

12

1980 1985 1990 1995 2000 2005 2010

TX

-3

-2

-1

0

1

2

3

1980 1985 1990 1995 2000 2005 2010

D(TX)

he stability of data can be chec3ed throu$h ?8S8 and ?8S8 of S%uares test as shown in

the $rah -

Gra)h -.4,+

10 *ee :ppendix :, Page 44

Page | 10


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!e app' t&e @&o( ;rea+point test on t&e ear 1992. T&e res#'t is gi-en &ere

#nder

Ta1e -.-,,

@&o( ;rea+point Test 1992

Dstatisti%

27.8161

9 Pro). 3,27 0.0000

Source: AuthorsC estimations

T&e res#'t s&o(s t&at t&e PD-a'#e is 'ess t&an 0.1 it $eans reHe%t t&e o. i.e.

%oeJ%ient are not dierent

;e"ore t&e E*, (e app' t&e @oDintegration Test )et(een t&e -aria)'es. T&e $ain

"#n%tion o" t&is test is to nd o#t t&e %orre'ation or 'ong r#n re'ations&ip a$ong t&e

-aria)'es t&at (e #se in t&e $ode'. K.K %oDintegration test is app'ing on t&e data set.

ere t&e n#'' &pot&esis is %oDintegration is not present a$ong t&e -aria)'es i.e.

oL No %oDintegration. !e ta+e :+ai+e in"o %riterion, *o a%%ording to t&at (e %&ose

3rdoption 'ag -a'#e 4. T&e /es#'ts is gi-en &ere #nder in ta)'e 4.5

Ta1e -.5,*

CO(It!)%ati* T!"t R!"+lt":

6y)'$hes7ed Tra%e Ma8. E"en

2one 0.0000 0.0001

At most 1 0.0089 0.0053

At most ! 0.7542 0.7542Note: Critical value for Trace & Max. Eigen is 0.05(i.e. 5%) at none, at ost ! & at ost "

Note:Trace & Max#Eigen value test in$icates " cointegrating en(s) at te 0.05 level




Page | 11


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T&e a)o-e ta)'e s&o(s t&at t&e data set is %oDintegrated (it& ea%& ot&er i.e.

PD-a'#e M0.05, reHe%t o. No( o#r data set is a)'e to predi%t t&e dependent

-aria)'e.

4.2 R!)%!""i*:

No( (e app' t&e regression on o#r data set.

!&en (e r#n t&e esti$ate CF#ation o" regression "or nding t&e re'ations&ip

)et(een infation and ot&er %onsider -aria)'es, (e get t&e "o''o(ing res#'ts,

Ta1e -.9,4

Va%iabl! C*!,'i!t -%*b.

@ 5.131751 0.0000T 3.343119 0.2093TG D0.276876 0.0000


T&e %o'#$n o" -aria)'es s&o(s t&e %onstant and t&e independent -aria)'es (&i%& is

Trade openness Taxes on prod#%t in ter$s o" o" =>P. @oeJ%ient %o'#$n s&o(s


Page | 12


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t&e re'ations&ip its i$pa%t o" %&ange on >ependent aria)'e. I" a'' t&e

independent -aria)'es are


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No( (e (ant to %&e%+ B#'ti is present in o#r $ode' or not, *o t&is test is doing on

C-ie(7.

Ta1e -.2,5


No( (e (ant to prod#%e t&e B#'ti in o#r data so (e

add ot&er -aria)'es 'i+e =>P, >I, /eser-es and Cxpense. =>P is t&e =ross >o$esti%

Prod#%t o" Pa+istan, >I is t&e tota' oreign >ire%t In-est$ent, /eser-e is t&e Tota'

reser-es o" t&e %o#ntr and expense is t&e tota' expendit#re on go-ern$ent. :"ter

t&e addition o" t&ose -aria)'es in o#r $ode' as a independent -aria)'es and (e

app' regression. /es#'ts are gi-en &ere #nder

Ta1e -.3,9


@ 2.654247 0.0001T D0.199749 0.7766TG D0.032222 0.1814>I 8.49CD14 0.1277

CGPCN*C D1.39CD11 0.0841/C*C/C D5.28CD11 0.0046

=>P 3.16CD13 0.0001


Ta1e -.,+,



Page | 14

Va%iabl!C!t!%!/

VIF

@ N:T 1.275879TG 1.275879


15/66



R("+a%!/0.97275

7D+%bi(Wat"* "tat

0.840578A/0+"t!/ R(

"+a%!/

0.96108

1-%*bF("tati"ti' 0.000000


:"ter t&e addition o" t&ose a)o-e $entioned -aria)'es (e see t&at t&e a%%#ra% o"

t&e $ode' is in%reased and >! -a'#e is a'so i$pro-ed. No( (e %&e%+ t&e B#'ti )

#sing arian%e Infation a%tors test. /es#'t is gi-en )e'o(

Ta1e -.,,,2

Va%iabl!C!t!%!/

VIF

@ N:T 2.538203TG 7.656810>I 12.60151

CGPCN*C 48.94946/C*C/C 5.211307

=>P 97.69613


T&e res#'t %'ear' s&o(s t&at t&e B#'ti is no( o%%#r in o#r $ode'. :%%ording to

IQ10 it $eans $#'ti is present. *o "or t&e re$o-a' o" B#'ti (e re$o-e t&e &ig&est

a'#e o" I -aria)'e is re$o-ed "ro$ $ode' i.e. =>P



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:"ter t&e re$o-a' o" =>P "ro$ t&e $ode' (e again r#n t&e E*. /es#'t is gi-en &ere

#nder

Ta1e -.,*,3


@ 5.215598 0.0000T D0.449581 0.7064TG D0.126133 0.0002>I D2.43CD11 0.3470

CGPCN*C 1.69CD13 0.0648/C*C/C 1.69CD11 0.0587


Ta1e -.,4*+

R("+a%!/0.96631

8D+%bi(Wat"* "tat

1.006713

A/0+"t!/ R(

"+a%!/

0.95509

1-%*bF("tati"ti' 0.000000


T&e res#'t s&o(s t&at o#r $ode' is i$pro-ing. No( (e again %&e%+ t&e B#'ti



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Ta1e -.,-*,

C!t!%!/Va%iabl! VIF

@ N:T 2.517279TG 7.650205>I 3.476622

CGPCN*C 6.413904/C*C/C 4.168791


No( :)o-e ta)'e s&o(s t&at t&e B#'ti is not present in o#r $ode' )e%a#se a'' t&e

-a'#es o" I M 10. Its $eans t&at t&e I not exist in o#r $ode'.

>#r)in !atson *tat -a'#e is 1.006 s&o(s t&at t&e Positi-e:#to is present in t&e

$ode'.or %onr$ation (e see t&e :%t#a', itted, resid#a' Ta)'e R grap&

Ta1e -.,5**



Page | 17


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T&e a)o-e grap& s&o(s %'ear' t&at in t&is $ode' positi-e :#to is present. T&e sign

o" pre-io#s Crror -a'#e "or%es to t&e sa$e sign o" s#)seF#ent error -a'#e. T&is is

S-e :#to %orre'ation.

!e &a-e to nd t&at t&is :#to is prod#%ing signi%ant ee%t in o#r $ode' or not. *o

(e app' *eria' @orre'ation EB Test (it& t&e Eag a'#e 1. In t&is test o#r oL No :#to

is present. T&e /es#'t is gi-en &ere #nder

Ta1e -.,9*4

;re#s%&D=od"re *eria' @orre'ation EB Test

Dstatisti% 3.273903 Pro). 1,29 0.0919



Page | 18


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T&e res#'t s&o(s t&at PM0.1 so reHe%t t&e oL its $ean t&at t&e :#to is present and

signi%ant "or o#r $ode'.*o no( (e #se t&e :/1 %o$$and on o#r $ode' to

re$o-e t&e a#to "ro$ t&e $ode'.

Ta1e -.,*-


@ 5.038798 0.0000T D0.078381 0.9457TG D0.119209 0.0008>I D2.53CD11 0.2907

CGPCN*C 1.81CD13 0.0402/C*C/C 1.69CD11 0.0410

:/1 0.002500 0.9930

R("+a%!/ 0.971837D+%bi(Wat"* "tat 1.332108A/0+"t!/ R("+a%!/ 0.958839-%*bF("tati"ti' 0.000000


T&e -a'#e o" t&e >! is i$pro-ing. *o (e %&e%+ its signi%an%e ) *eria' @orre'ation

EB Test

Ta1e -.,2*5


Dstatisti% 9.402229 Pro). 1,12 0.0098


Ta)'e s&o(s t&at t&e :#to is present and it is a'so signi%ant.

No( (e &a-e to re$o-e a#to "ro$ o#r $ode' ) #sing @@/:N /@IT B>CE.



Page | 19


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irst (e $a+e t&e resid#a' series (it& -aria)'e na$e is Oerr1. No( app'ing

regression on t&is series (it& dependent err1 and independent err1D1. T&e res#'t is

gi-en &ere #nder

Ta1e -.,3*9

Va%iabl!

C*!,'i!

t -%*b.

C//1D1 0.375336 0.0519


In a)o-e ta)'e %oeJ%ient is %a''ed /&o 5 0.37533667No( (e generate t&e series

o" trans"or$ o" a'' in%'#ding -aria)'es i.e. TEI,TT TTG. CF#ation is gi-en )e'o(

TLIF5 LIFt( LIFt(1

TTO5 TOt( TOt(1

TT85 T8t( T8t(1

TFDI5 FDIt( FDIt(1

TE8-ENSE5 E8-ENSEt( E8-ENSEt(1

TRESERVE5 RESERVEt( RESERVEt(1

:"ter t&e $a+ing o" a'' trans"or$ -aria)'es (e app' E* on t&ose transpose

-aria)'es. T&e res#'t is gi-en &ere #nder


Page | 20


21/66



Ta1e -.*+*


@ 3.093188 0.0000TT D0.711264 0.3670TTG D0.085478 0.0007T>I D1.50CD11 0.4448

TCGPCN*C 2.37CD13 0.0071T/C*C/C 1.64CD11 0.0297

R("+a%!/0.956402

D+%bi(Wat"*

"tat1.531915

A/0+"t!/ R(

"+a%!/

0.940832 -%*bF("tati"ti' 0.000000


It s&o(s t&at t&e >! is i$pro-ing )#t it a'so s&o(s t&e S-e :#to. No( (e %&e%+ t&e

signi%ant o" :#to.

Ta1e -.*,*2


Dstatisti% 0.138522 Pro). 1,13 0.7158


:)o-e ta)'e s&o(s t&at t&e Pro). Q0.1 so a%%ept t&e o i.e. No :#to is present in

o#r $ode'

:"ter t&e re$o-a' o" :#to, (e &a-e to %&e%+ eit&er etro is present or not in o#r

$ode'. *o (e app' etros+edasti%it Test (it& option (&ite. In t&is test o#r oL No

etro is present. T&e o#tp#t is gi-en &ere #nder



Page | 21


22/66



Ta1e -.***3

Heteroskedasticit Test" #$ite

F-statistic 1.950%1% &ro'. F(514) 0.1492


T&e pro). -a'#e is greater t&an 0.1 itAs $ean t&at a%%ept t&e o i.e. No etro is

present.

4.3 D +99 V a%iabl!":

No( (e (ant to %&e%+ t&e ee%t o" de$o%ra% and eart&DF#i%+ %an ee%t on

Infation. *o (e $a+e t&e t(o >#$$ aria)'es o" >e$o%ra% and eart&F#a+e and

data %o''e%ted "ro$ t&e internet and added in o#r $ode' and app' t&e E*. /es#'ts

are gi-en &ere #nder

Ta1e -.*44+

Va%iabl!

C*!,'i!

t -%*b.

@ 3.032895 0.0000

TT

D

0.330542 0.7637

TTG

D

0.087022 0.0201T>I D1.56CD11 0.4629

TCGPCN*C 2.64CD13 0.0876T/C*C/C 1.35CD11 0.2487



Page | 22


23/66



>CB@/:@

D

0.020739 0.7765

C:/TU:VC

D

0.042462 0.6260


T&e a)o-e a)'e s&o(s t&at t&e a%%ording to o#r predi%tion o" infation (it&

independent -aria)'es, t&ere is no signi%ant ee%t o" de$o%ra% eart&F#a+e on

t&e infation o" Pa+istan.

4.4 Ca+"alit T!"t :

No( (e &a-e to %&e%+ t&e %a#se and ee%t o" ea%& -aria)'e to t&e ot&er. or t&at

(e app' =ranger %a#sa'it test t&at s&o(s (&i%& -aria)'e prod#%e %a#se to ot&er

-aria)'e "or ee%t. In t&is test oL No %a#sa' re'ations&ip i.e. P Q 0.1L :%%ept o.

T&e res#'t ta)'e, its tpe $eans ;iDdire%tiona', niDdire%tiona' or No %a#sa'it

re'ations&ip its dire%tion $eans (&i%& -aria)'e %a#se to ot&er is gi-en &ere

#nder

Ta1e -.*-4,

N+ll ;*t

.

T;!

*=

Ca+"a

lit

Di%!'ti*

T>I does not =ranger @a#se TCGPCN*C 0.40

98

No N @:*:E /CE:TIN

TCGPCN*C does not =ranger @a#se T>I 0.76

58


Page | 23


24/66



TEI does not =ranger @a#se TCGPCN*C 0.94

54

ni TCGPCN*C WTEI

TCGPCN*C does not =ranger @a#se TEI 0.02

94

T/C*C/C does not =ranger @a#se

TCGPCN*C

0.02

66

;i T/*C/C X TCGPCN*C

TCGPCN*C does not =ranger @a#se

T/C*C/C

0.01

30

TT does not =ranger @a#se TCGPCN*C 0.51

02

N N @:*:E /CE:TIN

TCGPCN*C does not =ranger @a#se TT 0.34

06

TTG does not =ranger @a#se TCGPCN*C 0.07

51

ni TTG W TCGPCN*C

TCGPCN*C does not =ranger @a#se TTG 0.10

03

TEI does not =ranger @a#se T>I 0.25

57

ni T>I W TEI

T>I does not =ranger @a#se TEI 0.03

56

T/C*C/C does not =ranger @a#se T>I 0.00

09

ni T/C*C/C W T>I

T>I does not =ranger @a#se T/C*C/C 0.52

38

TT does not =ranger @a#se T>I 0.57

74

No N @:*:E /CE:TIN

T>I does not =ranger @a#se TT 0.77

33

TTG does not =ranger @a#se T>I 0.68 No N @:*:E /CE:TIN

Page | 24


25/66



11T>I does not =ranger @a#se TTG 0.16

74

T/C*C/C does not =ranger @a#se TEI 0.06

66

;i TEI X T/C*C/C

TEI does not =ranger @a#se T/C*C/C 0.01

05

TT does not =ranger @a#se TEI 0.15

74

No N @:*:E /CE:TIN

TEI does not =ranger @a#se TT 0.27

49

TTG does not =ranger @a#se TEI 0.21

07

ni TEI W TTG

TEI does not =ranger @a#se TTG 0.00

29

TT does not =ranger @a#se T/C*C/C 0.94

23

No N @:*:E /CE:TIN

T/C*C/C does not =ranger @a#se TT 0.76

76

TTG does not =ranger @a#se T/C*C/C 0.00

36

;i TTG X T/C*C/C

T/C*C/C does not =ranger @a#se TTG 0.00

05

TTG does not =ranger @a#se TT 0.03

82

;i TTG X TT

TT does not =ranger @a#se TTG 0.09

42


4.> -**l!/ Data:

Page | 25


26/66



No( (e go "or t&e Pane' data (&i%& t&e @rossDse%tiona' data S ti$e series data o"

t&ree %o#ntries i.e. Pa+istan , @&ina India. aria)'es #sed "or esti$ation o"

infationI is Taxes on Prod#%t in o" =>PTG, Trade openness T, oreign >ire%t

In-est$ent >I Tota' /eser-es /eser-e. >ata (as %o''e%ted "ro$ !or'd ;an+

site and period "ro$ 1990 to 2010. No( (e app' t&e /egression on t&is Poo'ed data

(&i%& is %a''ed PE* Po''ed rdinar Eeast *F#are. /es#'t is gi-en &ere #nder

Ta1e -.*54*

Va%iabl!

C*!,'i!

t -%*b.

@ 129.1800 0.0000T 142.2380 0.0000

TG

D

12.38832 0.0000>I D1.63CD10 0.4169

/C*C/C 2.99CD11 0.0429


Ta1e -.*944

R("+a%!/ 0.645197D+%bi(Wat"*

"tat

0.3474

36A/0+"t!/ R(

"+a%!/0.620728 -%*bF("tati"ti'

0.0000

00Source: AuthorsC estimations



Page | 26


27/66



T&e %o'#$n o" -aria)'es s&o(s t&e %onstant and t&e independent -aria)'es (&i%& is

Trade openness T, Taxes on prod#%t in ter$s o" o" =>P TG, oreign >ire%t

In-est$ent >I Tota' /eser-es /eser-e. @oeJ%ient %o'#$n s&o(s t&e

re'ations&ip its i$pa%t o" %&ange on >ependent aria)'e. I" a'' t&e independent

-aria)'es are


28/66



I" (e (ant to separate o#t t&e ee%t o" %onstant "or ea%& %o#ntr, (e &a-e to $a+e

t&e d#$$ -aria)'e o" t&ese %o#ntries i.e. @&ina, India Pa+istan

;#t #n"ort#nate' (e tr o#r 'e-e' )est "or /ando$ ixed ee%t o" PE* )#t t&e

res#'t (as not a%&ie-ed )e%a#se (&en (e r#n t&e regression eF#ation (it& d#$$

-aria)'es o" Pa+ , @&ina India (it& pane' optionL @rossDse%tiona' /ando$ and

ixed Period /ando$ ixed s&o( t&e error (&i%& is gi-en &ere #nder

4.? T @ T!"t:

T Test is #se to %o$pare t&e $eans o" t&e series and %&e%+ t&at t&e dieren%e in

t&e $eans is in a''o(ed $argin o" error*.C or not. T test %an )e %'assied in to

t&ree %ategories.

1. ne *a$p'e T Test.2. Independent sa$p'e T Test.3. Paired sa$p'e TDTest.

No( (e app' t&ese tests on o#r data in *P** so"t(are.

irst (e app' t&e one sa$p'e TD Test on t&e data o" infation o" Pa+istan "ro$ 1990

2010 (it& t&e @'ai$ -a'#e o" 100. pot&esis o" TDTest is Beans are sa$e. T&e res#'t

is gi-en &ere #nder

Ta1e -.*4-


Page | 28


29/66



One;Sa#)e Tes$

est Ealue 1++

Si$ (!tailed)

Inflation 1'1 +7+

;ur claim 0alue is 1++ and the result of onesamle test shows that mean of the inflation series

and our claim is different with each other (ie 4G+1 re,ect :o)

2ow we want to chec3 the inflation of 4a3istan @ Inflation of ?hina So we aly indeendent

samle est In this test first we chec3 the 0ariances of both series are same or not hen we

comare its means he result of the Indeendent samle est is $i0en here unde

Ta1e -.*245

Inde)enden$ Sa#)es Tes$He0enes est for

J%uality of Eariances ttest for J%uality of eans

F Si$ Si$ (!tailed)

Inflation J%ual 0ariances

assumed

'7- +-1 5'1

J%ual 0ariances not

assumed

5'!

he result of He0eneCs est shows that the 0ariances of Inflation for 4a3istan @ ?hina are notsame because we re,ect the :o (ie Eariances are e%ual) but the means of these two countriesC

inflation are same

2ow we chec3 the A0era$e inflation of 4a3istan at the time of Democracy eriod from 1''+ K

1''" and after the Democracy the a0era$e inflation of 4a3istan eriod form 1''' K !++7 For

e9amination of these two inflations we aly 4aired Samle K est in which our claim is the

a0era$e inflation of at the time and after the Democracy is same he result is $i0en here under

Ta1e -.*349



Page | 29


30/66



Pared Sa#)es Tes$

4aired Differences

Si$ (!tailed)

4air

1

Inf/At/Demo

Inf/Afte/Demo

75!5 +++

he abo0e table si$ 0alue shows that we re,ect our claim and conclude that the A0era$e inflation

at the time of Democracy @ after the democracy is not same 0alue L0e si$n shows that the

inflation at the time of democracy is hi$her than the after the democracy

-. ANOVA:

2ow we ha0e to chec3 that the inflation of 4a3istan ?hina @ India are at same trend or not Sowe aly the ;ne


31/66



TLIF = C + 1TTO + 2TTX + 3TFDI + 4TEXPENSE + 5TRESERVE +

E

Or

TLIF 5 3.32> ( .33>42TTO ( .22TT8 (

1.>?E(11TFDI

2.?4E(13TE8-ENSE 1.3>E(11TRESERVE E

TEI is t&e Eog o" Infation in ter$s o" @ons#$er Pri%e Index, TT is t&e Trade

penness, >I is t&e oreign >ire%t In-est$ent, TCGPCN*C is t&e Tota' Cxpendit#re

o" t&e =o-ern$ent T/C*C/C is t&e Tota' /eser-e o" t&e @o#ntr. In t&is $ode'

Trade openness, >I /eser-es are inDsigni%ant ee%t on infation. Taxes on

Prod#%t in per%entage o" =>P and =o-ern$ent Cxpendit#re are prod#%ing t&e

signi%ant ee%t on infation (it& negati-e and positi-e re'ation respe%ti-e'. #r

a)o-e $entioned $ode' is "ree "ro$ a'' )arriers o" /egression i.e. B#'ti, :#to

etro.

I" Taxes in%rease ) 1#nit t&en infation de%reases ) 0.087 ot&er t&ings re$ain

%onstant and -i%eD-ersa. I" Cxpenses in%rease ) 1#nit t&en infation in%reases )

2.64CD13 ot&er t&ings re$ain %onstant.

:%%ording to o#r $ode' >e$o%ra% Cart&F#a+e does not ee%t on Infation o"

Pa+istan.

I" (e #se t&e %rossDse%tiona' data o" t&ree %o#ntries Pa+istan, India @&ina "or

esti$ation o" %o$)ine Infation @PI (it& independent -aria)'e T, TG, /C*C/C

>I. T&e esti$ate eF#ation is gi-en &ere #nder

Page | 31


32/66



IF 5 12.1 142.23TO ( 12.3T8 ( 1.?3E(1FDI

2.E(11RESERVE E

T&e res#'t s&o(s t&at t&e >I is inDsigni%ant ee%t "or predi%ting Infation. !&i'e

T, TG /eser-e s&o(s t&e signi%ant i$pa%t. T /eser-e &a-e positi-e

re'ations&ip (it& Infation I (&i'e TG &as negati-e re'ations&ip (it& I.

t&er T TC*T s&o(s t&at t&e Infation o" Pa+istan is not 100 a%%ording to pre-io#s

data. !&i'e t&e Infation o" Pa+istan, @&ina India is sa$e. Infation at >e$o%ra%

and :"ter t&e >e$o%ra% is not sa$e and it a'so s&o(s t&at Infation at >e$o%ra%

Q Infation :"ter >e$o%ra%.

?. CONCLUSION & -OLICG SUHHESTION:

:"ter app' t&e E* te%&niF#e on o#r data (e "o#nd o#t t&at in Pa+istan Trade

openness does not ee%t on Infation o" Pa+istan (&i'e Taxes on Prod#%t &a-e a

signi%ant ee%t on Infation o" Pa+istan. !e %on%'#de t&at i" so$eone $a+es t&e

po'i% o" Pa+istan "or Infation, &e $#st +eep t&e ee%t o" Taxes on infation.

T&is res#'t $ig&t )e %&ange i" (e add so$e $ore i$portant R ee%ting -aria)'es in

t&e $ode' or %&ange (it& t&e ti$e. ;#t a%%ording to t&e a-ai'a)'e pre-io#s ears

data it s&o(s t&e a)o-e res#'ts.

!e s#ggested t&at i" po'i% $a+ers (ant to de%rease t&e infation rate t&e $#st

de%rease t&e Tax /ate. ;e%a#se i" t&e Tax /ate de%rease, t&e )#ing po(er o"

%ons#$er is in%rease %ons#$er p#r%&ase $ore goods d#e to t&is Tax re%eipts

in%rease and t&e infation rate goes do(n.

Page | 32


33/66



Page | 33


34/66



REFERENCES:

1F*L +. +LI, +. . /TT . . FTI+ ,. (2013). O& IFLTIO DO#TH LTIOHI& I &,IT" &&LITIO OF DL O/D TTI

&&OH. Pakistan Economic and Social Review 51(1) 13-53.

4 ea7e +. (2000). Inflation as Taxation: Theory and Evidence. Dearte7t o: co7oics/7i;ersit o: otti7. >. &a7caro . a'oro?ski . (2013). Trade oe77ess red@ces


35/66



A--ENDI8 A:

S$a$'nary Tes$ Res0$s:

In:

@ Hot$esis" LIF $as a @7it root=o


36/66



@


37/66



@ Hot$esis" D(LIF) $as a @7it root

=o


38/66



Date" 042414 Tie" 13"30

ae (ad@sted)" 1981 2010

I7c@ded o'ser;atio7s" 30 a:ter ad@ste7ts

Caria'e oe::icie7t td. rror t-tatistic &ro'.

TO(-1) -0.439524 0.154994 -2.835%55 0.0084

0.150103 0.053520 2.804631 0.0091

-sG@ared 0.223118 +ea7 dee7de7t ;ar -0.001239

d@sted -sG@ared 0.1953%2 .D. dee7de7t ;ar 0.0244%%

.. o: re


39/66



=o


40/66



D(TO(-1)) -1.36%069 0.182141 -%.505555 0.0000

-0.000833 0.009600 -0.086%90 0.9315

KTD(1980) -3.6%-05 0.000532 -0.06900% 0.9455

-sG@ared 0.684214 +ea7 dee7de7t ;ar 0.000%09

d@sted -sG@ared 0.659923 .D. dee7de7t ;ar 0.041065

.. o: re


41/66



@


42/66



-sG@ared 0.6534%% +ea7 dee7de7t ;ar -0.052898

d@sted -sG@ared 0.640643 .D. dee7de7t ;ar 1.458161

.. o: re


43/66



H%a;< *= All Va%iabl!" at L!#!l & 1"t Di$!%!'!:

2.5

3.0

3.5

4.0

4.5

5.0

5.5

1980 1985 1990 1995 2000 2005 2010

LIF

.00

.04

.08

.12

.16

.20

1980 1985 1990 1995 2000 2005 2010

D(LIF)

Page | 43


44/66



.28

.30

.32

.34

.36

.38

.40

1980 1985 1990 1995 2000 2005 2010

TO

-.06

-.04

-.02

.00

.02

.04

.06

1980 1985 1990 1995 2000 2005 2010

D(TO)

Page | 44


45/66



2

4

6

8

10

12

1980 1985 1990 1995 2000 2005 2010

TX

-3

-2

-1

0

1

2

3

1980 1985 1990 1995 2000 2005 2010

D(TX)

Page | 45


46/66



CUSUM & CUSUMJ:

COW BREAK-OINT TEST:

$o? reakoi7t Test" 1992

@ Hot$esis" o 'reaks at seci:ied 'reakoi7ts

Cari7< re


47/66



C*(it!)%ati* T!"t:Date" 042314 Tie" 16"29

ae" 1980 2010

I7c@ded o'ser;atio7s" 29

eries" LIF TO TX

La


48/66



(co@7s)

0 -5.%14290 -5.%14290 -5.53429% -5.53429% -5.2%4528

1 -5.536833 -5.%80121E -5.692315 -5.644%95 -5.493535

2 -5.052421 -5.250622 -5.21%510 -5.3%4242 -5.26380%

3 -4.355843 -4.532315 -4.532315 -4.%4490% -4.%4490%

Date" 042414 Tie" 13"48

ae (ad@sted)" 1985 2010


Tre7d ass@tio7" Li7ear deteri7istic tre7d

eries" LIF TO TX

La


49/66



oraiJed coi7te


50/66



&ro'(F-statistic) 0.000000

Va%ia'! Iati* Fa't*%"

Caria7ce I7:atio7 Factors

Date" 041614 Tie" 20"11

ae" 1980 2010

I7c@ded o'ser;atio7s" 31

oe::icie7t /7ce7tered e7tered

Caria'e Caria7ce CIF CIF

0.%12695 190.5028

TO %.28%6%9 231.562% 1.2%58%9

TX 0.000854 1%.%1%28 1.2%58%9

R!)%!""i* O+t;+t it< a//iti*al i/!;!/!t #a%aibl!":

Dee7de7t Caria'e" LIF+et$od" Least G@aresDate" 050314 Tie" 23"38ae (ad@sted)" 1990 2010I7c@ded o'ser;atio7s" 21 a:ter ad@ste7ts


2.65424% 0.50%0%4 5.234440 0.0001TO -0.199%49 0.690616 -0.289232 0.%%66TX -0.032222 0.022909 -1.406483 0.1814

X& 8.49-14 5.24-14 1.619415 0.12%%

C -1.39-11 %.50-12 -1.859191 0.0841FDI -5.28-11 1.5%-11 -3.369123 0.0046D& 3.16-13 5.83-14 5.412884 0.0001

-sG@ared 0.989110 +ea7 dee7de7t ;ar 4.31%329d@sted -sG@ared 0.984442 .D. dee7de7t ;ar 0.4%441%.. o: re


51/66



0.122%25 294.2161

TO 1.19%686 340.%335 2.538203

TX 0.000560 85.44055 %.656810

FDI 1.9%-21 22.2%888 12.60151

X& 4.%8-26 128.05%1 48.94946

C %.42-23 12.69191 5.21130%

D& 2.12-23 496.9%50 9%.69613

R!)%!""i* O+t;+t a=t!% %!9*#al *= M+lti:Dee7de7t Caria'e" LIF

+et$od" Least G@ares

Date" 042114 Tie" 18"5%

ae (ad@sted)" 1990 2010



5.215598 0.309621 16.84510 0.0000

TO -0.449581 1.1%0%3% -0.384015 0.%064

TX -0.126133 0.025419 -4.962208 0.0002

FDI -2.43-11 2.51-11 -0.9%08%4 0.34%0

X& 1.69-13 8.50-14 1.992%84 0.0648

C 1.69-11 8.28-12 2.04600% 0.058%

-sG@ared 0.966318 +ea7 dee7de7t ;ar 4.31%329

d@sted -sG@ared 0.955091 .D. dee7de7t ;ar 0.4%441%

.. o: re


52/66



A't+al7 Fitt!/ & R!"i/+al Tabl!:

B%!+"'


53/66



F-statistic 0.545651 D@r'i7-#atso7 stat 1.583588

&ro'(F-statistic) 0.%654%%

Page | 53


54/66



AR(1) Command:

Dee7de7t Caria'e" LIF

+et$od" Least G@ares

Date" 042214 Tie" 14"38

ae (ad@sted)" 1991 2010I7c@ded o'ser;atio7s" 20 a:ter ad@ste7ts

o7;er


55/66



!t!%*"!/a"ti'it T!"t: W


56/66



@ sG@ared resid 0.063380 c$?arJ criterio7 -1.%18166

Lo< ikei$ood 29.16459 Ha77a7-B@i77 criter. -2.038%08

F-statistic 38.64525 D@r'i7-#atso7 stat 1.519936

&ro'(F-statistic) 0.000000

Ca+"alit T!"t"

&air?ise ra7


57/66



TTX does 7ot ra7


58/66



I/!;!/!t Sa9;l! T(T!"t:

Group Statistics

co@7tr +ea7 td. De;iatio7 td. rror +ea7

I7:atio7 &akista7 21 83.3483 39.85904 8.69%96

$i7a 21 88.664% 20.%6863 4.53209

Independent Samples Test

Le;e7es Test :or

G@ait o: Caria7ces t-test :or G@ait o: +ea7s

F i


59/66



Paired Samples Test

&aired Di::ere7ces t d: i) td. rror i


60/66



!omo"eneous Su#sets

In$lationT@keHDa

co@7tr

@'set :or a$a 0.05

1

I7d 21 82.4883&akista7 21 83.3483$i7a 21 88.664%i


61/66



1994 48.80975 3.887930 0.353271 10.26447 3.08CS11 3.72CS094.21CS0

8

1995 54.83462 4.004322 0.361328 10.39406 3.57CS11 2.53CS097.23CS0

8

1996 60.52306 4.103024 0.383301 8.974834 4.40CS11 1.31CS099.22CS0

8

1997 67.40785 4.210762 0.368523 8.307499 4.80CS11 1.79CS09 7.16CS08

1998 71.60602 4.271179 0.340117 7.348666 5.15CS11 1.63CS095.06CS0

8

1999 74.57240 4.311770 0.323200 6.889377 5.58CS11 2.12CS095.32CS0

8

2000 77.82872 4.354511 0.281296 6.902335 6.58CS11 2.09CS093.08CS0

8

2001 80.27897 4.385508 0.303715 6.808495 6.84CS11 4.22CS093.83CS0

8

2002 82.92043 4.417881 0.305376 6.883243 7.54CS11 8.80CS098.23CS0

8

2003 85.33684 4.446606 0.328445 7.002761 8.21CS11 1.18CS10 5.34CS08

2004 91.68985 4.518412 0.303001 6.915122 8.14CS11 1.07CS101.12CS0

9

2005 100.0000 4.605170 0.352533 5.803492 9.51CS11 1.11CS102.20CS0

9

2006 107.9211 4.681400 0.356817 6.090232 1.16CS12 1.29CS104.27CS0

9

2007 116.1217 4.754638 0.329904 5.454878 1.42CS12 1.58CS105.59CS0

9

2008 139.6782 4.939342 0.355942 2.655788 1.91CS12 9.02CS095.44CS0

9

2009 158.7412 5.067275 0.320718 4.980725 2.14CS12 1.36CS102.34CS0

9

2010 180.7763 5.197260 0.328689 4.159875 2.60CS12 1.73CS102.02CS0

9

VARIABLES DATA AFTER TRANSFORMED

Page | 61


62/66



*b" TLIF TTO TT8 TE8-ENSE TRESERVE TFDI1980 N: N: N: N: N: N:1981 1.862477 0.215970 7.085876 N: 8.67CS08 842009961982 1.877701 0.184497 5.776770 N: 1.27CS09 232649941983 1.917851 0.229941 6.166846 N: 2.00CS09 5498169.1984 1.953792 0.205988 7.121651 N: 6.03CS08 44453887

1985 1.986242 0.205900 5.910157 N: 8.25CS08 1.11CS081986 2.000201 0.220921 5.626656 N: 9.28CS08 564152151987 2.033015 0.212641 6.448085 N: 8.91CS08 896932441988 2.100533 0.224057 7.270290 N: 6.52CS08 1.38CS081989 2.144264 0.223970 7.118735 N: 8.55CS08 1.41CS081990 2.202576 0.255362 7.003397 N: 5.58CS08 1.66CS081991 2.281514 0.209505 6.824310 1.33CS11 8.27CS08 1.66CS081992 2.330515 0.245429 6.929191 1.63CS11 1.07CS09 2.39CS081993 2.391491 0.245267 6.459051 1.92CS11 1.42CS09 2.22CS081994 2.472418 0.207838 6.280340 2.03CS11 2.97CS09 2.90CS081995 2.545042 0.228732 6.541433 2.41CS11 1.13CS09 5.65CS081996 2.600058 0.247682 5.073570 3.06CS11 3.59CS08 6.51CS081997 2.670749 0.224656 4.938921 3.15CS11 1.30CS09 3.70CS081998 2.690729 0.201797 4.230563 3.35CS11 9.52CS08 2.37CS081999 2.708643 0.195541 4.131158 3.65CS11 1.51CS09 3.42CS082000 2.736148 0.159988 4.316504 4.49CS11 1.29CS09 1.08CS082001 2.751103 0.198135 4.217800 4.37CS11 3.43CS09 2.67CS082002 2.771843 0.191381 4.327770 4.97CS11 7.21CS09 6.79CS082003 2.788416 0.213826 4.419233 5.38CS11 8.51CS09 2.25CS082004 2.849440 0.179724 4.286734 5.06CS11 6.28CS09 9.18CS082005 2.909248 0.238806 3.207998 6.45CS11 7.09CS09 1.78CS092006 2.952914 0.224499 3.911973 8.03CS11 8.71CS09 3.45CS092007 2.997540 0.195977 3.168995 9.85CS11 1.10CS10 3.99CS092008 3.154755 0.232117 0.608376 1.38CS12 3.09CS09 3.34CS092009 3.213363 0.187120 3.983912 1.42CS12 1.02CS10 2.97CS082010 3.295330 0.208312 2.290430 1.80CS12 1.21CS10 1.14CS09

Page | 62


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A--ENDI8 C:

-OOLED DATA

o's IF TO TX FDI C &, HI ID

1 - 90 32.26388 0.389095 11.22645 2.45P08 1.05P09 1.000000 0.000000 0.0000001 - 91 36.06820 0.35554% 11.03800 2.58P08 1.22P09 1.000000 0.000000 0.000000

1 - 92 39.49%94 0.3%88%9 11.0%215 3.36P08 1.52P09 1.000000 0.000000 0.000000

1 - 93 43.43%34 0.38%4%3 10.61483 3.49P08 2.00P09 1.000000 0.000000 0.000000

1 - 94 48.809%5 0.3532%1 10.2644% 4.21P08 3.%2P09 1.000000 0.000000 0.000000

1 - 95 54.83462 0.361328 10.39406 %.23P08 2.53P09 1.000000 0.000000 0.000000

1 - 96 60.52306 0.383301 8.9%4834 9.22P08 1.31P09 1.000000 0.000000 0.000000

1 - 9% 6%.40%85 0.368523 8.30%499 %.16P08 1.%9P09 1.000000 0.000000 0.000000

1 - 98 %1.60602 0.34011% %.348666 5.06P08 1.63P09 1.000000 0.000000 0.000000

1 - 99 %4.5%240 0.323200 6.8893%% 5.32P08 2.12P09 1.000000 0.000000 0.000000

1 - 00 %%.828%2 0.281296 6.902335 3.08P08 2.09P09 1.000000 0.000000 0.000000

1 - 01 80.2%89% 0.303%15 6.808495 3.83P08 4.22P09 1.000000 0.000000 0.000000

1 - 02 82.92043 0.3053%6 6.883243 8.23P08 8.80P09 1.000000 0.000000 0.000000

1 - 03 85.33684 0.328445 %.002%61 5.34P08 1.18P10 1.000000 0.000000 0.000000

1 - 04 91.68985 0.303001 6.915122 1.12P09 1.0%P10 1.000000 0.000000 0.000000

1 - 05 100.0000 0.352533 5.803492 2.20P09 1.11P10 1.000000 0.000000 0.000000

1 - 06 10%.9211 0.35681% 6.090232 4.2%P09 1.29P10 1.000000 0.000000 0.000000

1 - 0% 116.121% 0.329904 5.4548%8 5.59P09 1.58P10 1.000000 0.000000 0.000000

1 - 08 139.6%82 0.355942 2.655%88 5.44P09 9.02P09 1.000000 0.000000 0.000000

1 - 09 158.%412 0.320%18 4.980%25 2.34P09 1.36P10 1.000000 0.000000 0.000000

1 - 10 180.%%63 0.328689 4.1598%5 2.02P09 1.%3P10 1.000000 0.000000 0.000000

2 - 90 46.%5418 0.291592 5.436419 3.49P09 3.45P10 0.000000 1.000000 0.000000

2 - 91 48.41095 0.316%45 5.904868 4.3%P09 4.82P10 0.000000 1.000000 0.000000

2 - 92 51.4803% 0.361131 6.384421 1.12P10 2.49P10 0.000000 1.000000 0.000000

2 - 93 58.98%89 0.419%63 %.%582%0 2.%5P10 2.%3P10 0.000000 1.000000 0.000000

2 - 94 %3.28483 0.4121%2 %.126614 3.38P10 5.%8P10 0.000000 1.000000 0.000000

2 - 95 85.66%82 0.3880%6 6.6%5101 3.58P10 8.03P10 0.000000 1.000000 0.000000

2 - 96 92.%9882 0.3805%6 6.44%089 4.02P10 1.12P11 0.000000 1.000000 0.0000002 - 9% 95.40354 0.390126 %.30%609 4.42P10 1.46P11 0.000000 1.000000 0.000000

2 - 98 94.59%%3 0.363932 %.8%39%3 4.38P10 1.53P11 0.000000 1.000000 0.000000

2 - 99 93.26590 0.3%6906 8.668405 3.88P10 1.61P11 0.000000 1.000000 0.000000

2 - 00 93.50401 0.442438 8.%12942 3.84P10 1.%2P11 0.000000 1.000000 0.000000

2 - 01 94.1%995 0.430804 9.436%49 4.42P10 2.20P11 0.000000 1.000000 0.000000

2 - 02 93.45858 0.4%6953 9.982116 4.93P10 2.98P11 0.000000 1.000000 0.000000

2 - 03 94.53888 0.569135 10.61208 4.95P10 4.16P11 0.000000 1.000000 0.000000

2 - 04 98.21094 0.653522 10.%%193 6.21P10 6.23P11 0.000000 1.000000 0.000000

2 - 05 100.0000 0.686330 10.86681 1.04P11 8.31P11 0.000000 1.000000 0.000000

2 - 06 101.4632 0.%056%1 10.96039 1.24P11 1.08P12 0.000000 1.000000 0.000000

2 - 0% 106.2830 0.680280 10.61313 1.56P11 1.55P12 0.000000 1.000000 0.000000

2 - 08 112.5158 0.622436 10.3556% 1.%2P11 1.9%P12 0.000000 1.000000 0.000000

2 - 09 111.%249 0.49015% 10.68594 1.31P11 2.45P12 0.000000 1.000000 0.000000

2 - 10 115.4281 0.550329 11.56839 2.44P11 2.91P12 0.000000 1.000000 0.000000

3 - 90 34.%4813 0.152390 9.2%9%43 2.3%P08 5.64P09 0.000000 0.000000 1.000000

3 - 91 39.56%%9 0.166950 8.955240 %353%638 %.62P09 0.000000 0.000000 1.000000

3 - 92 44.2319% 0.181154 9.143%02 2.%%P08 9.54P09 0.000000 0.000000 1.000000

3 - 93 4%.04602 0.193128 8.2339%6 5.50P08 1.4%P10 0.000000 0.000000 1.000000

3 - 94 51.85012 0.19%321 8.62%195 9.%3P08 2.42P10 0.000000 0.000000 1.000000

3 - 95 5%.151%4 0.224%33 8.815252 2.14P09 2.29P10 0.000000 0.000000 1.000000

3 - 96 62.28234 0.215515 8.2%808% 2.43P09 2.49P10 0.000000 0.000000 1.000000

3 - 9% 66.%4440 0.222296 %.935%44 3.58P09 2.84P10 0.000000 0.000000 1.000000

Page | 63


64/66



3 - 98 %5.5%525 0.232910 %.465935 2.63P09 3.06P10 0.000000 0.000000 1.000000

3 - 99 %9.10448 0.2438%9 8.1519%6 2.1%P09 3.60P10 0.000000 0.000000 1.000000

3 - 00 82.2%612 0.2643%3 8.113%61 3.58P09 4.11P10 0.000000 0.000000 1.000000

3 - 01 85.30%84 0.255453 %.66540% 5.4%P09 4.91P10 0.000000 0.000000 1.000000

3 - 02 89.054%3 0.290001 %.588251 5.63P09 %.16P10 0.000000 0.000000 1.000000

3 - 03 92.44403 0.300652 %.59049% 4.32P09 1.04P11 0.000000 0.000000 1.000000

3 - 04 95.92662 0.3685%4 8.350626 5.%%P09 1.32P11 0.000000 0.000000 1.000000

3 - 05 100.0000 0.413052 8.200264 %.2%P09 1.38P11 0.000000 0.000000 1.000000

3 - 06 106.1455 0.4529%8 %.950019 2.00P10 1.%8P11 0.000000 0.000000 1.000000

3 - 0% 112.90%0 0.448%62 8.121014 2.52P10 2.%%P11 0.000000 0.000000 1.000000

3 - 08 122.3368 0.522693 5.%99131 4.34P10 2.5%P11 0.000000 0.000000 1.000000

3 - 09 135.6438 0.454%%1 5.695191 3.56P10 2.85P11 0.000000 0.000000 1.000000

3 - 10 151.9106 0.482389 6.%%%%38 2.%4P10 3.00P11 0.000000 0.000000 1.000000

Page | 64


65/66



A--ENDI8 D:

DATA FOR S-SS USE IN T @ TESTS & ANOVA

G!a

%

C*+t

%

Iati*

C*/

!

C*+t

%

Iati*

C*/!C*+t

%

Iati*

C*/

!1

-ai"t

a

32.261

C 54.83 1 85.67 2 57.15 3

1

?

60.521

92.802

62.283

1

67.411

95.402

66.743

1

71.611

94.602

75.583

1

74.571

93.272

79.103

2

77.831

93.502

82.283

2

1

80.281

94.182

85.313

2

2

82.921

93.462

89.053

2

3

85.341

94.542

92.443

2

4

91.691

98.212

95.933

2

>

100.001

100.002

100.003

2?

107.92 1 101.46 2 106.15 3

2

116.121

106.282

112.913

2

139.681

112.522

122.343

2

158.74 1 111.72 2 135.64 3

Page | 65


66/66



21

180.771

115.422

151.913

DATA FOR -AIRED SAM-LE:

Iati* At D!9*'%a' Iati* A=t!% D!9*'%a'G!a% Iati* G!a% Iati*1990 32.26 1999 74.571991 36.07 2000 77.831992 39.50 2001 80.281993 43.44 2002 82.921994 48.81 2003 85.341995 54.83 2004 91.691996 60.52 2005 100.001997 67.41 2006 107.921998 71.61 2007 116.12

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Impact of Taxation on Inflation