Economic Growth and Human Development: Analysis of Impact-Reversibility Behaviour of Macro-Variables

This paper aimed to examine the nature of impact- reversible reactions, the catalytic (activators) of forward and backward impact reactions of economic growth and human development variables and to set the empirical priorities strategies (EPSs) for achieving both economic growth and human development in developed and developing countries. The data set used in the analysis was constructed by merging countries' human development indices; gross national income (GNI) per capita of the 20 selected countries from 2011 to 2016. The polynomial regression is used to analyse data for examination of the nature of the impact- reversibility behaviour of the economic growth and human development variables. The paper evidenced that the ICT development, government expenditures, net export, life expectancy, personal income and education are activators of the forward and backward impacts-reactions. It concluded that both economic growth and human development are strongly related and activating each other, reversibly (interchangeably). Moreover, the economic growth is a primary input of human development in the forward reaction, i.e., economic growth to human development, and in the later stage (long – run term) the human development becomes an input of economic growth in the backward impact reaction, .i.e. human development to economic growth. The paper recommended that developing countries, in order to attain both economic growth and human development will set their priorities strategies on increases exportation in relating to importation (net export), ICT developments in a country, which reduces labour and operation costs, and government expenditures. On the other hand, the developed countries in order to attain economic growth as their only priority strategic goal will set their priority strategies to increase its income indices, life expectancy and employment rates.