Abstract:
The purpose of this study is to examine the impact of GDP per hour worked, total hours worked and labor force on GDP growth in advanced countries. The broad objective of the paper is to find out the relationship among variables. Gross Domestic Product (GDP) growth rate has been selected as dependent variable and GDP per hour worked, total hours worked and labor force is independent variables. We have collected our data for the period of 1870-2006. We used EViews 9 for data analysis. Different statistical tests were performed to fulfill the objectives of the paper. We used Augmented Dickey Fuller Test for testing unit root. For testing cointegration Johansen Test for Co-Integration has been used. We also used Error Correction Model (ECM), QUSUM and QUSUM square test for testing stability of the model. Paper shows that there has relationship between variables. GDP hour worked total hours worked are negatively correlated with GDP growth rate. Labor force is positively correlated with GDP growth rate.
