Munich Personal RePEc Archive

Impact of Public Investment on Economic Growth

Rabnawaz, Ambar and Jafar, Rana Muhammad Sohail (2015): Impact of Public Investment on Economic Growth. Published in: South Asia Journal of Multidisciplinary Studies , Vol. 1, No. 8 (30 September 2015): pp. 62-75.


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The study examines the relationship between Gross domestic product and public investment. Time series data for empirical investigation covers the period 1980-2009. The data has collected from Pakistan bureau of Statistics, State bank of Pakistan (SBP) and Stockholm International Peace Research Institute (SIPRI). Empirical results show, there is a positive relationship between GDP and public investment in short run. The increase in GDP causes a rapid increase in public investment. Granger causality test apply to check the causality. Results of test show that bi-causal relationship exists between GDP and public investment. Causality runs from GDP to public investment and similarly, from public investment to GDP.

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