Causality between Domestic Investment and Economic Growth: New Evidence from Argentina

Sayef Bakari

MPRA Paper from University Library of Munich, Germany

Abstract: This study investigates the causal relationship between domestic investment and economic growth in Argentina over the period 1980-2022, utilizing cointegration analysis and a Vector Error Correction Model (VECM). The empirical results indicate that domestic investment has no significant long-term effect on economic growth. However, economic growth has a positive long-term impact on domestic investment, suggesting that growth stimulates investment rather than the reverse. In the short term, a bidirectional relationship exists between domestic investment and economic growth. These findings provide important policy implications for fostering sustainable economic development in Argentina.

Keywords: Domestic Investment; Economic Growth; Argentina; VECM. (search for similar items in EconPapers)
JEL-codes: C32 E22 O40 O54 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-fdg, nep-gro and nep-ipr
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:121799

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