The Impact of Housing and Non- Housing Investment on GDP in Open Economy: Case Study of Iran

اقتصاد و توسعه منطقه ای

Article 5, Volume 18, Issue 1, June 2011   

Document Type: مقالات پژوهشی

DOI: 10.22067/erd.v18i1.13678

Authors

Ali Akbar Gholizadeh^* ; Javad Barati

Abstract

Abstract
This study investigates the impact of housing and non- housing investment on the Iran's gross domestic production (GDP) using quarterly data from 1370-1 to 1386-4. Considering that Iran has an open economy and that the net export plays an important role in GDP fluctuations, this research focuses on the difference between the effects of residential and non-residential investment in open and with closed economy. Similar to the study of Bisping & Patron (2008), this research uses VECM and generalized impulse response function (GIRF) to survey the importance of components of GDP. In closed economy, the results demonstrate that non- housing investment is more important than residential investment on GDP, but in open economy the impact of residential investment on GPD is more than non- housing investment. Consumption and government expenditure in both models, open economy & closed economy, have the most effects on GDP.

Key words: Housing investment, Open economy macroeconomics, Generalized impulse response (GIRF)Jel: F41, R42, C52

Keywords

Housing investment; Open economy macroeconomics; Generalized impulse response