The Impact of the Contribution of Total Factor Productivity in the Libyan Economic Growth (1970-2010)

Najeb M. Al-Shafi'e


The study aims at analysing the impact factors of overall productivity growth and its determinants in the Libyan economy based on annual data to cover the period (1970-2010). However, using a standard form of model which approved by the Libyan economy. This model is based on the estimated data for the overall productivity of factors such as physical capital used the Perpetual Inventory Method by calculating the capital stock in a manner (Nehru and Dhareshwar).
The results of the study revealed that the physical capital is the key determinant of the economic growth has been achieved negative rates compared with human capital and productivity. It was found that the contribution of human capital seem relatively low, although they contain a positive value. Therefore, the study results showed that the rate of growth factors of TFP did not get high rates of the Libyan economic growth. Thus, the contribution to the economic growth was depending on the overall the growth rate of positive and weakness less than 1%, and in some of periods has achieved negative. Also, this study recommended focusing on enhancing factors affecting the positive growth in the TFP and strengthening the influencing positive growth factors of overall productivity. This is which led in promoting the national economy growth that allows the decision maker to focus on motivating the growth factors for the non-oil sectors within the strategic direction for economic reform to diversify sources of income.


Economic growth, capital, human capital, total factor productivity, growth accounting, Libyan Economy

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