Human or Physical Capital, Which Influences Sustainable Economic Growth Most? A Study on Bangladesh

Abstract

The economy of Bangladesh is experiencing sustained economic growth. Thus, the purpose of this study is to analyze how human capital and material, or physical capital interacts to influence the economic growth of Bangladesh. As a response to analyzing mechanisms of economic growth from 2000 to 2019, the present paper conducts quantitative research into the link between human capital, material capital, and economic growth in Bangladesh with the use of a Vector Autoregression Model (VAR). The study discovered that both human capital and physical capital can contribute to economic growth in different time dimensions, but their respective efficiency varies. As a result of the research, recommendations are made for policy development.