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Endogenous Growth and Human Capital: A Comparative Study of Pakistan and Sri Lanka

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  • Qaisar Abbas

    (Barani Areas Development (ABAD), Rawalpindi.)

Abstract

Economic Growth has posed an intellectual challenge ever since the beginning of systematic economic analysis. Adam Smith claimed that growth was related to division of labour, but he did not link them in a clear way. After that Thomas Malthus developed a formal model of a dynamic economic growth process in which each country converge toward stationary per-capita income. According to this model, death rates fall and fertility rises when income exceed the equilibrium, and opposite occur when incomes are less than that level. Despite the influence of the Malthusian model in nineteenth century economists, fertility fell rather than rose as income grew during the past 150 years in the west and other parts of the world. The Neoclassical growth model of Solow (1956), which has been for the past thirty years the central framework to account for economic growth, focuses on exogenous technical population factors that determine output-input ratios, responded to the failure of Malthusian model. Neither Malthus’s nor the Neoclassicists approach to growth pays much attention to Human Capital. Yet the evidence is quite strong of close link between investments in human capital and economic growth. Since human capital embodied knowledge and skills, and economic development depends on advances in technological and scientific knowledge, development presumably depends on the accumulation of human capital. Investment in human capital has been a major source of economic growth in advanced countries. The negligible amount of human investments in underdeveloped countries has done a little to extend the capacity of people to meet the challenge of accelerated development.

Suggested Citation

  • Qaisar Abbas, 2001. "Endogenous Growth and Human Capital: A Comparative Study of Pakistan and Sri Lanka," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 40(4), pages 987-1007.
  • Handle: RePEc:pid:journl:v:40:y:2001:i:4:p:987-1007
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    References listed on IDEAS

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    Cited by:

    1. Khattak, Naeem Ur Rehman & khan, jangraiz, 2012. "The Contribution of Education to Economic Growth: Evidence from Pakistan," MPRA Paper 51180, University Library of Munich, Germany.
    2. Faisal Sultan Qadri, Faisal & Dr. Abdul Waheed, Waheed, 2011. "Human Capital and Economic Growth: Time Series Evidence from Pakistan," MPRA Paper 30654, University Library of Munich, Germany.
    3. Ahmad Abdel-Rahman & Mohammad Safarzadeh & Michael Bottomley, 2006. "Economic growth and urbanization: A cross-section and time-series analysis of thirty-five developing countries," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 53(3), pages 334-348, September.
    4. Ganegodage, K. Renuka & Rambaldi, Alicia N., 2011. "The impact of education investment on Sri Lankan economic growth," Economics of Education Review, Elsevier, vol. 30(6), pages 1491-1502.
    5. Panagiotis PEGKAS & Constantinos TSAMADIAS, 2015. "Does Formal Education At All Levels Cause Economic Growth? Evidence From Greece," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 15, pages 9-32, June.
    6. Nasir Iqbal & Musleh Ud Din & Ejaz Ghani, 2012. "Fiscal Decentralisation and Economic Growth: Role of Democratic Institutions," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 51(3), pages 173-195.
    7. Ibrahim, Taofik, 2016. "Human Capital-Growth nexus: the role of Government Spending on Education and Health in Nigeria," MPRA Paper 73712, University Library of Munich, Germany.
    8. Jangraiz KHAN & Zilakat Khan MALIK, 2015. "Education-Economic Growth Nexus: A Review," Journal of Economic and Social Thought, KSP Journals, vol. 2(2), pages 121-126, June.
    9. Bushra Yasmin & Zainab Jehan & Muhammad Ali Chaudhary, 2006. "Trade Liberalization and Economic Development: Evidence from Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 11(1), pages 19-34, Jan-Jun.
    10. Qadri, Faisal Sultan & Waheed, Abdul, 2014. "Human capital and economic growth: A macroeconomic model for Pakistan," Economic Modelling, Elsevier, vol. 42(C), pages 66-76.
    11. Sultan, Faisal & Tehseen, Syed & Arif, Imtiaz, 2009. "Human Capital and Economic Growth: The Quest for the Most Relevant Level of Education in Pakistan," MPRA Paper 59181, University Library of Munich, Germany.
    12. Arshad, Shahzad & Munir, Kashif, 2015. "Factor Accumulation and Economic Growth in Pakistan: Incorporating Human Capital," MPRA Paper 67012, University Library of Munich, Germany.
    13. T. Vinayagathasan & S. Vijesandiran, 2015. "Dynamic Relationship between Human Capital and Economic Growth in Sri Lanka: A Co-Integration Analysis," Growth, Asian Online Journal Publishing Group, vol. 2(2), pages 20-29.

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