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1. Abstract
The objective of the study is to measure the impact of changing oil prices, and other macro economic variables like consumption, government expenditures and average exchange rates on Gross Domestic Product-GDP in the context of Pakistan’s economy. The study is secondary data based and the observation is 150 with five variables and 30 years of data. The data is taken from World Bank, Inflationdata.com, State Bank of Pakistan, Economic Survey of Pakistan, Federal Reserve Bank of America, Federal Bureau of Statistics Pakistan, Pakistan Development Review, Federal Board of Revenue, OPEC and Euro Journal. First the stationary of the variables were checked by augmented dickey fuller-unit root test and data. All variables were stationary except the average exchange rate which was non stationary. By ordinary least square method and Johansen Cointegration test both short rum and long run relationship is found. The major finding of the study are these that changing oil prices have negative relationship with GDP, while changing government expenditures and average exchange rates hav…
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