The Role of Population Growth, Inflation, and Public Education Expenditure in Shaping Pakistan's GDP Growth

Abstract

Economic Growth refers to an increase in aggregate production of goods and services in an economy. Economic Growth as a concept of economics is observed in the form of a function that includes Labor Force, Capital (Physical and Human) and Technology. The unit used to describe economic growth is the “GDP” or Gross Domestic Product. GDP is defined as the total monetary value of all final goods and services produced in the market within a country during a period of 1 year. In an economy economic growth is the expansion in the production of goods and services that is in capital merchandise, workforce, innovation, and human resources. Economic process can be generated using various ways like, by expanding the volume of capital and assets. Adding capital raises the productivity of labor within the economy. Achieving innovations and enhancements in the technological sector and promoting economic growth in the labor force. Equality encourages creation of more workers which eventually generates more economic goods and services. Lastly, recruitment of human capital that enhances their skills by providing them training at the job that makes them more productive. Economic growth is immensely important as it indicates about the performance and magnitude of the economy.
To estimate economic growth three methods have been developed known as the Expenditure Approach, Production and Income Approach. For Instance, Expenditure Approach is the summation of Government spending and Investment, Private Consumption and Investment and (exports –imports). The GDP growth Rate is the percentage change in real GDP over a time period. Economic growth Rate is an important unit measure as it indicates the progress of an economy more importantly the direction and extend of such growth or fall. Thus, a positive number indicates Expansion while a negative value indicates Contraction in the Economy. Economic growth can be expressed in a formula as follows: Economic growth = GDP 2 – GDP 1 / GDP 1. Whereas GDP 1 is previous time period GDP for Example 2021 while GDP 2 is current time period i.e. GDP 2022.