During the latter part of 2007 and early 2008, it became obvious that Pakistan's macroeconomic situation was deteriorating rapidly, and that unless immediate measures were taken, the country may slip into a balance of payments crisis. This paper analyzes Pakistan's current macroeconomic economic...

Monetary and credit contraction, espoused by monetarists as a key policy for controlling inflation, will increase the cost of financing working capital needs. This has an immediate short-run stagflationary impact coming from the supply side of the economy. This study uses a one-sector macro...