Public investment and growth in case of Madagascar

Andrianady, Josué R. and Camara, Alyda E. and Randrianantenaina, Kantotiana S. (2023): Public investment and growth in case of Madagascar.

Abstract

This paper explores the role of public investment in the process of economic growth, in the context of Madagascar’s economy, using the vector autoregressive approach (VAR). The model also includes monetary supply and exportation. The result show that public investment has positive effect on growth in short term especially in the second quarter but the effect slowly goes down in the next quarter. This is due to the impact of investment on monetary supply which can lead to potential rise of prices. The effect of investment on growth reaches his highest in the fifth quarter after that its return to his stationary state.

• Item Type: MPRA Paper
• Language: English
• Keywords: Madagascar, VAR, Public investment, money, exportation, GDP
• Subjects: A - General Economics and Teaching > A1 - General Economics; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E22 - Investment ; Capital ; Intangible Capital ; Capacity; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies; H - Public Economics > H5 - National Government Expenditures and Related Policies > H54 - Infrastructures ; Other Public Investment and Capital Stock; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R4 - Transportation Economics > R42 - Government and Private Investment Analysis ; Road Maintenance ; Transportation Planning

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