Forchecking that whether the results are economic significance and reasonable. Theestimated model is passed through diagnostic tests of the econometrics to checkits consistency and model is checked the stability of the model. Result ofTable 6 shows the Diagnostic tests: serial correlation, functional form,normality, heteroscedasticity, and structural stability.Itis found that there is no correlation i.e., The critical values for the testare dL = 0.

88, dU = 1.61, so 4 ? dU = 3.12 and 4 ? dL = 2.39. As the teststatistic (1.870818) lies between the upper (1.61) and 4 ? dU = 3.12, therefore,hence the null hypothesis of no autocorrelation is not rejected and it would beconcluded that the residuals from the model appear to be not autocorrelated.

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Therefore, the analysis satisfies the assumption of independent of errors. The modelof functional form is matched with test of Ramsey’s RESET.  As Bera-Jarque statistic p-value is 0.72 whichis greater than 0.05, therefore, do not reject the null hypothesis and it isconcluded that the residual values are normally distributed.AsP-value for the F-statistic value which is 0.

58 exceeds 0.05 level ofsignificance, therefore, it is concluded that there is no heteroscedasticity inthe variance of the residuals. In the presence of heteroscedasticity, aremedial measure can be taken to rectify this situation by using the robuststandard errors option for correcting the (conventional) standard errors. Finally,as all Diagnostic test have model passes all of the reported diagnostic tests.  it can be say that results of study are economicallysignificant and reasonable because the estimated model of study have passed allthe diagnostic tests.5.5.

Test For Structure Stabiltiy OfModelWiththe help of cumulative sum of recursive residuals (CUSUM) and cumulative sum ofsquares of recursive residuals (CUSUMSQ) structural stability of model are checked.The concept of stability testing technique was first presented by Brown et al.(1975), the stability of model of error correction model selected by ARDL canbe test with CUSUM and CUSUMSQ plots which are shown in Figures 5.1 and 5.2respectively.

According to both the plots, the plots are within critical boundsat 5 percent level of significance, Therefore, they confirm the long-runrelationships among variables and the stability of the model.