The capital market plays an essential role in the growth of the economy
of the country. This is the rationale that the industrial bodies, government
advisors and even the central bank of the country keep a close eye on the
activities of the stock market. This thesis explores the relationship between
the stock market development and economic growth in Pakistan for the
period of 1988 to 2012. We investigated the stock market development
and economic growth relationship by using the measure of stock market
development (market capitalization of listed domestic companies) and the
measures of economic growth (Real GDP, Money Supply M2, Consumer
Price Index). The results revealed that development in stock market can be
attained by increase in economic growth of a country.
