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The Relative Effects of Public and Private Capital on Guyana's Economic Performance, 1980 to 2018: A Cointegration Analysis

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  • MODESTE, NELSON

    (College of Business, Tennessee State University, Nashville, Tennessee, USA)

Abstract

Using data from Guyana for the period 1980-2018, this paper examines two issues. The first issue studied in the paper is the relative effects of public and private capital on Guyana’s economic performance. The second issue investigated is the sources of output growth for the economy. To examine the first issue, a Cobb-Douglas production function, expressed in the form of a conditional autoregressive distributed lag equation, is applied. While for the second issue, a growth accounting expression is used. Two key empirical results emerge from this study. The first is that public capital has exerted, on the country’s economic growth, a greater impact than private capital. Notwithstanding this finding, the second key result is that both public and private capital are found to be statistically significant in growing the economy over the long run. Given these results, a major implication arising from the empirical analysis in this study is the need for expansion in both public and private capital to facilitate the growth of the economy, over the long run. Gli effetti relativi del capitale pubblico e privato sulla performance economica della Guyana nel periodo 1980-2018: un’analisi di cointegrazione Questo articolo prende in esame due problemi utilizzando i dati della Guyana nel periodo 1980-2018. Il primo sono gli effetti relativi del capitale pubblico e privato sulla performance economica del paese. Il secondo esamina le fonti della crescita economica del paese. Per analizzare il primo problema, si applica una funzione di produzione Cobb-Douglas, stimata con il metodo ARDL. Per analizzare il secondo problema, invece, è utilizzata la contabilità della crescita. Dallo studio emergono due risultati empirici chiave. Il primo è che il capitale pubblico ha un impatto maggiore del capitale privato sulla crescita economica del paese. Nonostante ciò, il secondo risultato chiave è che sia il capitale pubblico che quello privato risultano essere statisticamente significativi nella crescita economica di lungo periodo del paese. In considerazione di ciò, l’implicazione che emerge dall’analisi empirica di questo studio è la necessità di aumentare sia il capitale pubblico che quello privato per facilitare la crescita economica di lungo periodo del paese.

Suggested Citation

  • Modeste, Nelson, 2024. "The Relative Effects of Public and Private Capital on Guyana's Economic Performance, 1980 to 2018: A Cointegration Analysis," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 77(3), pages 463-482.
    • Handle: RePEc:ris:ecoint:0979
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    References listed on IDEAS

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    More about this item

    Keywords

    Guyana; Public Capital; Private Capital; Economic Growth; Sources of Economic Growth; Autoregressive Distributed Lag Model; Bounds Testing Approach;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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