Long run and Short run Macroeconomics Determinants of Economic Growth in the USA: Cointegration and VECM Analysis

Bakari, Sayef and Tiba, Sofien (2019): Long run and Short run Macroeconomics Determinants of Economic Growth in the USA: Cointegration and VECM Analysis.

Abstract

The aim of this paper is to search determinants of economic growth in the USA in the long run and the short run for the period 1970 – 2016. By using co-integration analysis and Vector Error Correction Model, we make the compensation of a lot of variables that they did not include with each other before. Empirical analysis show that in the long run that Final consumption expenditure, population, domestic investment, foreign direct investment inflow, and export are the source of economic growth in the long run, however foreign direct investment outflow, military expenditure, tax revenue, and imports are not seen as a source of economic growth in the long run. In the short run, all of the variables have not any effect on economic growth.

• Item Type: MPRA Paper
• Language: English
• Keywords: Macro Determinants, Economic Growth, Cointegration Analysis, VECM, USA.
• 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 > F14 - Empirical Studies of Trade; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity; 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; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O51 - U.S. ; Canada

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