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Impact of Public Investment on Economic Growth

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  • Rabnawaz, Ambar
  • Jafar, Rana Muhammad Sohail

Abstract

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.

Suggested Citation

  • Rabnawaz, Ambar & Jafar, Rana Muhammad Sohail, 2015. "Impact of Public Investment on Economic Growth," MPRA Paper 70377, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:70377
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    References listed on IDEAS

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    Cited by:

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    2. Reginald Masimba Mbona & Chilombo Stephania Mumba & Tinashe Mangudhla, 2021. "Fixed Investment and Economic Growth: ARDL and Causality Exploration for SADC Countries," Business and Economic Research, Macrothink Institute, vol. 11(4), pages 18-38, December.
    3. Ma'ale Suleman Al-Dughme, 2019. "The Impact of Public Debt and Public Investment on Economic Growth in Jordan," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 9(2), pages 149-157, April.
    4. Andrew K. Kamenju & Dr. T. Olweny, 2021. "The Nexus Between Internal Investment and Economic Growth in Kenya," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 11(2), pages 1-2.

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    More about this item

    Keywords

    Public investment; economic growth; GDP;
    All these keywords.

    JEL classification:

    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents

    NEP fields

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