Endogenous Growth and Human Capital: A Comparative Study of Pakistan and Sri Lanka

Economic Growth has posed an intellectual challenge ever since the beginning of systematic economic analysis. Adam Smith claimed that growth was related to division of labour, but he did not link them in a clear way. After that Thomas Malthus developed a formal model of a dynamic economic growth process in which each country converge toward stationary per-capita income. According to this model, death rates fall and fertility rises when income exceed the equilibrium, and opposite occur when incomes are less than that level. Despite the influence of the Malthusian model in nineteenth century economists, fertility fell rather than rose as income grew during the past 150 years in the west and other parts of the world.