Suchergebnisse

While the traditional neoclassical production model postulates
that it is the physical inputs such as private capital, labour, land,
and technology that are the key determinants of output and economic
development, in recent years, however, the social sector variables are
also considered to be critical, particularly for the long-run
sustainable growth of the economy. If fact, what has been argued in the
form of "new growth theories" is that social variables (e.g., education,
health, knowledge, etc.) generate "positive externalities" and, thus,
may facilitate and foster the process of economic growth and
development. Recently, the World Bank, based on a broad cross-country
study, found some very interesting results in the above context.
According to the World Development Report (1991): about fifty percent of
the factor productivity contribution to output growth comes not from
traditional physical inputs (capital, labour and land) but is a residual
factor. This unexplained factor, in the past, has been labelled (or as
the Report called it "baptised") as "technological change", however, the
World Bank (1991, p. 42) claims that:

One of the most significant developments in the current
economic scene in Pakistan has been the sharp increase in the rate of
inflation. The annual average rate of increase in the wholesale price
index (WPI) during the first seven months (July-January 1994-95) of the
current fiscal year has been about 19 percent as opposed to 11.3 percent
during the same period last year. A similar increase was also witnessed
in the consumer price index (CPI) which accelerated to 13 percent as
opposed to 11.1 percent during the previous period. Such a sharp
increase in prices in recent months has not only caused alarm in the
academic circles but has equally disturbed the country's chief
executive, the Prime Minister. The recent surge of inflation is a matter
of serious concern for a variety of reasons. First, Pakistan has been a
low-inflation country as it has experienced price stability during the
last three decades. The rate of inflation, as measured by an increase in
the WPI, averaged 2.6 percent during the 1960s. The components of the
WPI, i.e., food, raw materials, manufactures, and fuel and lubricants,
also grew by an average rate ranging from 2.0 to 3.4 percent p.a. during
then 1960s (see Table 1 for relevant statistics). The rate of inflation
crossed the single-digit threshold during the 1970s. The WPI and its
components increased at an annual average rate ranging from 12 to 18
percent. The double-digit inflation during the 1970s has been the result
of two major oil shocks, a massive devaluation of currency, and
devastating floods destroying agricultural crops. Pakistan returned to
the fold of the single-digit inflation during the 1980s. The rate of
inflation remained at the single-digit level during the first three
years of the 1990s with the exception of 1990-91, when the rate of
inflation increased to 11.7 percent as a result of the Gulf War. It is
only during the outgoing fiscal year and in the current year that the
rising inflation is posing a major threat to macroeconomic
stability.