The Impact of Domestic Investment on Economic Growth: New Policy Analysis from Algeria

Bakari, Sayef (2017): The Impact of Domestic Investment on Economic Growth: New Policy Analysis from Algeria.

Abstract

This paper investigates the relationship between domestic investment and economic growth in Algeria, by using co integration analysis of Vector Error Correction Model. The equation of the long run relationship shows that domestic investment has a negative effect on economic growth. However, in the short run term, domestic investment causes economic growth. These results prove that domestic investment is a source of economic growth for Algeria, but unfortunately it suffers from several obstacles and problems that are directly related to the poor management and the weak strategy for development and investment.

• Item Type: MPRA Paper
• Language: English
• Keywords: Domestic Investment, VECM, Causality, Economic Growth, Algeria.
• Subjects: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E22 - Investment ; Capital ; Intangible Capital ; Capacity; F - International Economics > F1 - Trade; F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Empirical Studies of Economic Growth ; Aggregate Productivity ; Cross-Country Output Convergence

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