2015

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Impact of Flow of Investment, terms of Trade and Human Capital on Economic Growth
(UMT, Lahore, 2015) Faiza Kalsoom
Economic growth is an increase in capacity of an economy to produce more goods and service over time that is necessary for the development of an economy. This study attempts to analyze the impact of lack of savings and investments, lack of goods and services and Human capital on economic growth of Pakistan during the period 1980-2013. These variables are regressed on GDP and OLS technique has been used. As in OLS all variables cannot be stationary at first difference so we applied Johansen Co-integration approach to get stationary at first difference and to check relationship among the variables. The results find out that foreign direct investment and human capital are positively related to the economic growth whereas volatility in terms of trade has a negative relationship with the economic growth of Pakistan. Government should focus on these factors to promote economic growth by spending on human capital and infrastructure should be improved to attract FDI.