Economic growth in Pakistan

A lot of studies have looked at the link between FDI inflows and economic development, the subject remains unresolved due to the diverse findings. The majority of research studies have used a conventional growth accounting methodology to examine the impact of FDI inflows on national income growth and other production parameters.

The influence of FDI on the growth rate of production was restrained by the existence of diminishing returns in physical capital in the framework of neoclassical models (Solow, 1956). As a result, FDI could only have a level influence on per capita production, not a rate effect. In other words, it was unable to change the pace of output increase over time.


Rahim Yar Khan.

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