Testing the Long Run Effect of Investment on Output in the Presence of Cointegration

S.H.P. Lau

Working Papers from Australian National University - Department of Economics

Abstract: A major empirical interest is whether a permanent change in economic fundamentals produces a growth effect. However, a direct time series analysis of this hypothesis may not always be feasible due to a lack of such events. This paper explains why a test regarding the long run effect of a temporary change in investment share may, under appropriate conditions, provide indirectly the answer regarding the effect of a (possibly hypothetical) permanent change in investment share.

Keywords: INVESTMENTS; TESTS (search for similar items in EconPapers)
JEL-codes: C50 C52 E20 E22 O40 (search for similar items in EconPapers)
Pages: 30 pages
Date: 1996
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Persistent link: https://EconPapers.repec.org/RePEc:fth:aunaec:304

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