Growth Equilibria: Policy-Driven Capital Accumulation and Pakistan's Economic Destiny

Abstract

The transmission mechanism of fiscal and monetary policy depends much on financial intermediaries, who also shape economic development and production. In developing nations like Pakistan, sector-specific tax exemptions and fiscal supremacy are somewhat common. This study underlines the important part of intermediaries in policy coordination by directly simulating the development response in such surroundings. It shows how loan-advancing techniques of the banking sector and the risk-taking behavior of deposit holders affect their impact on long-term development paths and productive capacity.