A Regularity in the Macro Drivers of Growth and Jobs: Accumulation of Physical Capital and Human Capital

  • Moazam Mahmood


Mahmood underscores a third empirical regularity in the macro drivers of growth and jobs. Among conventional macro drivers, investment and savings climb in lockstep up the income ladder and explain consistently how countries move up from least developed to lower- and middle-income to emerging economies. Other drivers, such as exports, consumption, and government expenditure, provide a far less satisfactory explanation of this trajectory. The problem is that least developed countries tend to be trapped at low levels of savings and investment. However, in complement with physical capital, investment in human capital—ranging from primary education to higher-skilled intangibles—discriminates very well between developing countries and advanced economies. This is a major macro argument demonstrating the impact of productive employment on growth itself.


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Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Moazam Mahmood
    • 1
    • 2
  1. 1.Lahore School of EconomicsLahore, PunjabPakistan
  2. 2.Capital University of Economics and BusinessBeijingChina

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