Pakistan Institute of Development Economics



Public-Private Investment and Economic Growth in Pakistan: An Empirical Analysis

Investment is an important component of aggregate demand and a leading source of economic growth. Change in investment not only affect aggregate demand but also enhance the productive capacity of an economy. A third important role highlighted in the literature refers to the innovation and modernisation of the capital equipment via technological progress. The investment plays an essential and vital role in expanding the productive. Maryam capacity of the economy and promoting long term economic growth [Jongwanich and Kohpaiboon (2008)]. Levine and Renelt (1992) argued that investment in capital goods is the most robust and vital determinant of economic growth. Gross domestic investment boosts economic growth by increasing physical capital directly and indirectly through technological spillovers [De Long and Summers (1995)].

Maryam Bint-e-Ajaz and Nazima Ellahi