Abstract
This paper attempts to quantify the impact of oil price changes on key macroeconomic aggregates for the economy of Pakistan using linear and nonlinear specifications with major emphasis on regulatory reforms initiated in the oil sector during the last decade. The empirical investigation confirms that the nexus between oil price and macro-economy has significantly changed after 2002-03 and that there is ample evidence of structural breaks. The study makes use of multivariate VAR using monthly data over the period 1995:1 to 2014:11 and finds significant relationship between changes in international oil prices and output during the post-deregulation period (2003-2014). However, the relationship turned out to be asymmetric in nature. Compared to this, the study did not find any significant relationship between oil price changes and major macroeconomic aggregates during the pre-deregulation period (1995-2002).

Gulzar Khan, Ather Maqsood Ahmed. (2014) Response of Pakistan’s Economy on Oil Price Fluctuations, , Volume-06, Issue-2.
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