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The Two-Gap Model suggests that the Poor countries have to rely on the foreign capital inflows (FCI) to fill the two Gaps: Import-Export Gap and the Savings-Investment Gap. There are many forms of the foreign capital inflows like FDI (Foreign Direct Investment), External loans & Credit, technical assistance, Project & non-project aid etc. So, UDC's (including Pakistan) have to rely on the Foreign aid, Foreign Debts, FDI and portfolio investments. The role of these external resources (FCI) always remains questionable. This paper analyzes the impact of the foreign capital inflow on GDP Growth in Pakistan during 1975-2004.

Health and education are indispensable factors for economic growth. This study examines the role of health and education in economic growth for 76 middle income countries during 1991-2016, using fixed and random effect approaches. The empirical findings demonstrates that a progressive link among life expectancy and economic growth while inverse association exists between infant mortality and economic growth. The outcomes of FE and RE models stated that secondary and tertiary level education contribute to increase in economic growth. The results also shows capital's encouraging impact on growth, while the labor has negative influence to economic growth. The impact of life expectancy, infant mortality, enrollment in secondary and tertiary education on economic growth is stronger in upper middle income countries (UMIC) with comparison to lower middle income countries (LMIC). The study recommended that economies should focus on education and better health facilities towards betterment especially in lower income states.

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