Abstract
This paper employs a general equilibrium econometric model to determine the extent of imported inflation in Pakistan during the 19705 and its impact on some related macroeconomic phenomenon. It was found that approximately 44 per cent of inflation observed during 1969 to 1981 was contributed by imports, while the remaining 56 per cent could be accounted for by domestic factors, in particular, the growth in money supply. The analysis also suggested that although higher import prices stimulated domestic production, they also tended to increase the trade deficit and to reduce real wages.
