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Granger Causality Test For The Government’S Capital Expenditures On The Gdp Of The Republic North Macedonia In Var Environment

Author

Listed:
  • Ivanovski, Zoran

    (University of Tourism and Management in Skopje)

  • Narasanov, Zoran

    (Winner Insurance, Vienna Insurance Group, Skopje)

  • Korunovska, Vesna

    (Customs Office of the Republic of North Macedonia)

Abstract

In this paper, we test Granger causality in VAR environment of the State Budget’s capital expenditures on the GDP. There is no doubt that capital expenditures for infrastructure projects, energetic, communications and similar have direct and indirect impact on the GDP growth, but non-essential capital spending raise the question if this part of public consumption as well part of the State Budget resources have influence on the Macedonian GDP growth. We are testing the impact of capital expenditures on the GDP by using econometric model of the Granger causality in VAR environment in order to determine if there is two-ways connections between GDP and capital expenditures from the Budget of the Republic of North Macedonia. We did not find Granger Causality between capital expenditures and GDP of the Republic of North Macedonia for the analyzed period 2006-2019. It implicates that capital expenditures cannot be used for the accurate GDP forecasts with acceptable level of certainty.

Suggested Citation

  • Ivanovski, Zoran & Narasanov, Zoran & Korunovska, Vesna, 2020. "Granger Causality Test For The Government’S Capital Expenditures On The Gdp Of The Republic North Macedonia In Var Environment," UTMS Journal of Economics, University of Tourism and Management, Skopje, Macedonia, vol. 11(2), pages 183-201.
    • Handle: RePEc:ris:utmsje:0296
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    References listed on IDEAS

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    More about this item

    Keywords

    Granger causality; VAR; environment; capital expenditures; probability;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions

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