2. OUTLINES
• INTRODUCTION
Chapter 1
• LITERATURE REVIEW AND ECONOMETRIC
MODELING
Chapter 2
• RESEARCH DESIGN AND METHODOLOGY
Chapter 3
• EMPIRICAL RESULTS AND DISCUSSION (ECONOMY
OF PAKISTAN)
Chapter 4
• EMPIRICAL RESULTS AND DISCUSSION
(COMPARISON OF PAKISTAN AND INDIA)
Chapter 5
• CONCLUSION AND RECOMMENDATIONS
Chapter 6
4. Background of the Study
• Economic growth and development is inevitable for survival and
sustainability of communities in countries.
• The research in the area of economic growth is generally based on
some generally accepted theory or model within framework of
economic growth.
• There are many such theories of which a few play vital role in in the
existing research on economic growth. These economic growth
theories include:
• Neoclassical Theory of Economic Growth and Endogenous Theory of
Economic Growth.
• The neoclassical theory is attributed mainly to the works by Robert
Solow (1956 and 1957) and Trevor Swan (1956).
• The Endogenous growth theory is attributed mainly to the works by
Arrow (1962), Romer (1986), and Lucas (1988).
• “Solow-Swan Growth Model” is most popular and simplest version
of the Neoclassical Growth Model.
5. • The OECD (2008), (The Organization for Economic Co-
operation and Development) states that “Economic growth
is the most powerful instrument for reducing poverty and
improving the quality of life in developing countries.”
• Concepts of productivity in the context of economic growth
are well established in past literature. Productivity is a ratio
of total volumes of input and output of an activity or a
project. Total factor productivity is an aggregated form of
productivity that includes weighted averages of both
capital productivity and labor productivity. Productivity
growth is a rate of change in overall productivity.
• Measure of labor productivity is based on hourly output of
a country's workforce employed. The OECD uses GDP per
hour worked as a measure of labor productivity that
gauges how efficiently labor input is combined with other
factors of production and used in production process.
6. Statement of the Problem
Desirable economic growth and development depend on
availability and utilization of sufficient levels of both capital and
labor and accomplishing that usually proves to be challenging for
majority of the countries.
Foremost challenge facing most countries, especially those with
developing economy, is to ever reach an ideal situation of capital
that further generate serious productivity obstructions leading to
lags in economic growth.
Most feasible resolution to this problem lies in alternative approach
of improvement of labor that would definitely lead countries to a
lesser challenging path to economic growth and development.
Research should be directed towards developing the understanding
of role of labor productivity in growth and development of
economies.
