The relationship between financial development, human capital development and economic growth in Sri Lanka.

Abstract

Abstract This paper examined the relationship between the financial development, Human Capital Development investment and economic growth in Sri Lanka using annual data over the period 1961 to 2015. Johansen Co-integration Technique and Vector Error Correction Model were used to investigate the relationships. The results demonstrated that there is a long-run equilibrium relationship. Further, human capital development and financial development causes economic growth. And economic growth causes human capital development. But no strong evidence that financial development causes human capital development Moreover, findings concludes that human capital development and financial development are matter for the economic growth of Sri Lanka.