On the validity of the Keynesian Absolute Income hypothesis in Pakistan: An ARDL bounds testing approach

The present paper contributes in existing economic literature by investigating the validity of the Keynesian Absolute Income hypothesis in Pakistan by applying the ARDL approach to cointegration. The findings of this paper validate the Keynesian absolute income hypothesis in Pakistan, where public savings and financial development add in private savings. This study opens up new insights for government to improve the level of private savings.