AN EMPIRICAL DEPENDENT ECONOMY MODEL FOR PAKISTAN

Pakistan's recent macroeconomic experience has been characterized by r apid growth, relatively low inflation, and the absence of severe balan ce-of-payments crises, in spice of very large fiscal deficits. This pa per addresses the possible role that external inflows, in the form of workers' remittances and concessional lending, may have played in gene rating these outcomes by conducting counterfactual simulations using a n empirically estimated ''dependent economy'' macroeconomic model.