EDUCATION, HEALTH, FOOD INFLATION AND ECONOMIC GROWTH IN PAKISTAN

Educated and healthy workforce always remains an invaluable asset for a country economic growth, whereas food inflation becomes the cause of food insecurity and, hence, hinders economic growth. The high prices of food in Pakistan may obstruct the attainment of the Millennium Development Goals and significantly threaten the food security and socioeconomic well-being of the poorest of Pakistan. This empirical work examines the cointegration and the causality among education, health, food inflation and economic growth in Pakistan by utilizing data from 1971-72 to 2010-11. The ARDL approach to cointegration and causality technique given by Toda Yamamoto (1995) were used for econometric analysis. This study reveals that the food inflation has negative, while the education has direct impact on economic growth both in the short-run and long-run. Two-way causality between each of ‘economic growth and education’, ‘education and food inflation’ and ‘food inflation and economic growth’ is also found. Macroeconomic policy makers including government must reduce food inflation that, in turn, leads to high economic growth and more opportunity for education. Threshold level of food inflation may first be estimated and food inflation in Pakistan must be kept below its threshold level.