External Shocks and Domestic Adjustment in Pakistan
In the late 1980s and early 1990s the Pakistan economy entered a deep economic crisis, characterized by large fiscal deficits and substantial balance of payments and external debt problems. The origin of this crisis can be traced back over the last two decades, during which external shocks and international capital inflows have had a strong and growing impact on Pakistan’s development. This chapter traces in detail the evolution of the current crisis, and focuses in particular on three issues which have direct policy relevance.
KeywordsCurrent Account Public Investment Capital Inflow External Shock External Debt
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