Albu, Lucian-Liviu (2010): Scenarios for post-crisis period based on a set of presumed changes in the interest rate – investment – GDP growth relationship.
Download (1MB) | Preview
The interest rate and investment are among the central variables influencing the growth rate. Due to the complexity empirically demonstrated of the interest rate – investment – GDP growth relationship, last decades a growing concern over the modelling this relationship has increased attention among officials, politicians, and economists. Moreover, the actual global crisis seems to provoke new changes in the economic growth mechanism. Based on statistical data for last period, we try to build a set of partial models in order to investigate the interest rate - investment - growth rate relationship in case of EU members and in the same time to verify some hypotheses usually in standard economic literature. Applying such simple models derived from standard ones in our experiment we estimated their parameters in case of EU countries. The main two partial models are referring to the impact of investment on GDP growth rate and respectively to the relation between interest rate and investment. Moreover, an equation including inflation dynamics was taken into account. Finally, the derived global model demonstrates complex dynamics, moreover permitting to compute so-called natural rate of interest and other key-parameters for macroeconomic decisions.
|Item Type:||MPRA Paper|
|Original Title:||Scenarios for post-crisis period based on a set of presumed changes in the interest rate – investment – GDP growth relationship|
|Keywords:||Investment; GDP Growth; Interest Rate; Depreciation Rate; Contour Plot|
|Subjects:||C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C51 - Model Construction and Estimation
E - Macroeconomics and Monetary Economics > E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment > E27 - Forecasting and Simulation: Models and Applications
P - Economic Systems > P2 - Socialist Systems and Transitional Economies > P24 - National Income, Product, and Expenditure; Money; Inflation
E - Macroeconomics and Monetary Economics > E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment > E22 - Capital; Investment; Capacity
|Depositing User:||Lucian Liviu Albu|
|Date Deposited:||12. Aug 2011 04:01|
|Last Modified:||13. Feb 2013 08:04|
Albu, L.-L. (1997): Strain and Inflation-Unemployment Relationship in Transitional Economies: A Theoretical and Empirical Investigation, CEES Working Papers, December, University of Leicester, Centre for European Economic Studies, Leicester.
Albu, L.-L. and Pelinescu, E. (2000): “Sustainability of Public Debt and Budget Deficit”, Economic Transition in Romania – Past, Present and Future (Eds.: Ruhl Christof, Daianu Daniel), The World Bank, Romanian Center for Economic Policies, Bucharest, Washington D.C., pp. 65-90.
Barro, R. (1988): “The Ricardian Approach to Budget Deficits”, NBER, Working Paper, no. 2685.
Blanchard, O. J. and Fischer, S. (1993): Lectures on Macroeconomics, The MIT Press, Cambridge, Massachusetts, London, England.
Carnot, N., Koen, V., and Tissot, B. (2005): Economic Forecasting, Palgrave MacMillan.
Pindyck, R. S. and Rubinfeld, D. L. (1998): Econometric Models and Economic Forecasting, Irvin McGraw-Hill, Boston, Massachusetts, New York, San Francisco.
Stournaras, Y. (1990): “Public Sector Debt and Deficits in Greece: The Experience of the 1980s and Future Prospects”, Revista di Politica Economica, VII-VIII, Roma, July-August, pp. 405-440.