Simultaneous Determination of Economic Growth, Human Capital Investment and Institutions in Pakistan: Econometric Evidence

Abstract

This research aimed to investigate the role of three key macro-economic variables i.e. investment in physical capital, human capital and institutions in explaining growth performance of Pakistan during 1980-2013, covering period of 33 years. The analysis aimed to pay special attention to the process of the accumulation of these variables and their interrelationships over the time period. This study uses 3SLS estimation technique to estimate the proposed simultaneous model. The present study concluded that quality of Education positively contribute towards human capital and economic growth. Furthermore human capital has positive and two way relation with quality of institutions. Policy prescription is suggested in the light of empirical findings.