Poverty and Inequality in Pakistan

This study shows the relationship among poverty, inequality, growth and inflation. The present study covers the period from 1980-2010, We used augmented dickey fuller test for statioarity. All variables are stationary at 1st difference. Unrestricted Co integration Rank Test shows that there are one cointegrating vectors. So we can use Johnson Co. integration for long run relationship. Inflation is significant and it shows positive relationship with dependent variable Poverty in long-run. Inequality is significant and shows positive relationship with dependent variable Poverty in long-run. Growth shows negative relationship with dependent variable Poverty in long-run. This relationship is insignificant because growth in Pakistan is without equality and not sustainable. Good governance, health facilities, education facilities, structural reforms, rural development, employment generation, inclusive growth, regional cooperation, fiscal policy, subsidies, control of inflation, change in social proposition, control of every kinds of conflicts can reduce the poverty.