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

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  • Bakari, Sayef

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.

Suggested Citation

  • Bakari, Sayef, 2017. "The Impact of Domestic Investment on Economic Growth: New Policy Analysis from Algeria," MPRA Paper 80053, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:80053
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    More about this item

    Keywords

    Domestic Investment; VECM; Causality; Economic Growth; Algeria.;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • F1 - International Economics - - Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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