The relationship between private investment and economic growth in Iran (With emphasis on endogenous economic growth model)

اقتصاد پولی مالی

Article 4, Volume 17, Issue 30, January 2011   

Document Type: پژوهشی

DOI: 10.22067/pm.v17i30.27239

Author

Ashkan Rahimzadeh

Abstract

The theoretical base of this paper is the economic growth model that completed with capital stocks (private and public) and human capital. At the first, hypothesis test about constant returns to scale is studied, and then the related variables with macroeconomic policies are added to the model. The results show that 1) the aggregate production function exhibits increasing returns to scale, 2) private investment and public investment and human capital have a positive effects on economic growth, 3) fiscal policy, import of goods and services growth with a two-period lag and the share of the oil sector value added in total GDP have a positive effect on economic growth. 4) Liquidity growth, tax growth and exports of non oil goods growth have no meaningful effect on economic growth, and 5) Liberalization of trading has a negative effect on economic growth.

Keywords

Economic Growth; Private investment; Liquidity growth; Exports of non-oil goods; Import of goods and services