Advances in Economics and Business Vol. 5(12), pp. 670 - 682
DOI: 10.13189/aeb.2017.051203
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Source of Growth in Libya: Is MRW Model Still Applicable for an Oil Based Economy?


Keshab Bhattarai 1,*, Abdelatif Taloba 2,3
1 Faculty of Business, Law, and Politics, University of Hull, Hull, HU6 7RX, UK
2 Faculty of Economics and Political Science, University of Misurata, Libya
3 PhD Student at the University of Hull, UK

ABSTRACT

Growth and fluctuations in the Libyan GDP depend on oil prices and oil revenues. With data on oil revenues, GDP, capital and labour inputs spanning more than five decades we find that labour has been the most important source of growth of the per-capita income in Libya over this period. While the role of capital accumulation has been less important but positive, the contributions of TFP to growth are negative more often. Based on our analysis we conclude that the Mankiw, Romer and Weil model of economic growth [1] is not applicable to Libya, which is one of the oil-based economies in the Arab World.

KEYWORDS
Sustainable Growth, Oil, Libya

Cite this paper
Keshab Bhattarai , Abdelatif Taloba . "Source of Growth in Libya: Is MRW Model Still Applicable for an Oil Based Economy?." Advances in Economics and Business 5.12 (2017) 670 - 682. doi: 10.13189/aeb.2017.051203.