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Citation Information

Type Journal Article - Journal of Economics and International Finance
Title Exploring the Causality Relationship between Trade Liberalization, Human Capital and Economic Growth: Empirical Evidence from Pakistan
Volume 2
Issue 8
Publication (Day/Month/Year) 2010
Page numbers 175-182
URL http://www.academicjournals.org/article/article1379511247_Chaudhry et al.pdf
There is a rapidly growing literature on the interaction between trade liberalization and economic growth but few have analyzed the relationship between trade liberalization, human capital and economic growth. This paper attempts to investigate empirically the causality relationship between trade liberalization, human capital and economic growth in Pakistan by employing co-integration and granger causality techniques of time series econometrics for the period of 1972-2007. The data on trade liberalization and economic growth are taken from the world development indicators, ESDS international website while human capital index is constructed based on the data from Pakistan economic survey. The empirical results reveal that there exist short run and long run co-integration and causality relationships among variables in the growth model. It implies that education and trade openness policies may be feasible with sustained economic growth. It is also found that causality runs from trade liberalization and human capital to economic growth. The results are also consistent with the growth theories and economic literature.

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