LABOR PRODUCTIVITY AND ECCONOMIC GROWTH, WHAT CAUSES WHAT: AN EMPIRCAL ANALYSIS
Download| Volume 2 Issue 1 2006 | |
|---|---|
| Author(s): |
Muhammad Mahmud
Abdul Rashid
|
| Abstract | The paper assesses the dynamic association between output growth and labor productivity growth rates using annual data of the period from 1972-73 to 2004-05. The estimates, based on Johansen full• information maximum likelihood technique, indicate that both the rates are cointegrated and move together in the long run. These results are robust to different lag orders. The study then used error correction model to explore the long run as well as short run causal linkages between them. Regarding the long run causation, the estimates of error correction term indicate a unidirectional causation that runs from labor productivity growth rate to output growth. This piece of evidence is suggesting that improving labor productivity would result higher economic growth in Pakistan. Regarding short run causality relationship, the analysis provides evidence based on the estimated F-values that there is feedback association between the rates of economic growth and labor productivity growth. |
| Keywords | economic growth, labor productivity, poverty level, human capital. |
| Year | 2006 |
| Volume | 2 |
| Issue | 1 |
| Type | Research paper, manuscript, article |
| Recognized by | Higher Education Commission of Pakistan, HEC | Category | "Y" | Journal Name | IBT Journal of Business Studies | Publisher Name | ILMA University | Jel Classification | - | DOI | https://doi.org/10.46745/ILMA.jbs.2006.21.06 | ISSN no (E, Electronic) | 2409-6520 | ISSN no (P, Print) | 2416-8393 | Country | Pakistan | City | Karachi | Institution Type | University | Journal Type | Open Access | Manuscript Processing | Blind Peer Reviewed | Format | Paper Link | http://ibtjbs.ilmauniversity.edu.pk/journal/jbs/2.1/6.%20Labor%20Productivity%20and%20Economic%20Growth,%20What%20Causes%20What-An%20Empirical%20Analysis.pdf |