Economic Growth, Domestic Working Labour Force, Gross Domestic Capital Formation, Domestic Exports and Imports

This study aimed to analyze the impact of the size of domestic working labour force, real gross domestic capital formation, real domestic exports and imports of goods and services, and political instability on real gross domestic product( RGDP) in Palestine during the period of 1994 -2013. To examine the empirical relationship between these explanatory variables and real (GDP) growth the study adopted a standardized Cobb- Douglas production function by using the annual official data of the Palestinian Central Bureau of Statistics (PCBS), and applying the Ordinary least Square method (OLS) and Second Order Auto Correlation Techniques. The empirical results of the model applied indicated that there is a positive relationship between the size of domestic working labour force, real gross domestic capital formation, real domestic exports and real gross domestic product( RGDP), and a negative relationship between real domestic imports of goods and services, and political instability and the real growth of (GDP). The study suggested several recommendations that can boost the level of growth, among them the most important one, is the urgent need for more investment in the economy as it leads to more formation of domestic capital which can count more in terms of economic growth in many ways.