An Augmented Solow Growth Model: The Role of Agriculture Productivity and Institutional Quality in Pakistan

Abstract

This study evaluates the relationship of agriculture productivity and an institutional quality with respect to economic growth in Pakistan using the time series data from 1974 up to 2010.The theoretical model is developed based on augmented Solow model is based on institutional quality and agriculture Productivity variables. The different econometric test were used for that include Phillips-Perron (PP) unit Root Test, Johansen Cointegration Test in Pakistan. The results of this study is unique in context of income convergence in Pakistan considering the role of agriculture Productivity as well as institutional quality. The feedback from the study is stronger for policy implication related to agriculture sector as well as Institutional quality for Pakistan. This argued that agriculture Productivity as well as institutional quality are essential for accelerating the economic growth of Pakistan.