Econometric Study of the Impact of Public and Private Investment on Economic Growth in Algeria during the Period (1970-2017) | Asian Journal of Economics, Business and Accounting

The influence of governmental and private investment on economic growth in Algeria from 1970 to 2017 is examined in this article. The Auto-Regressive Distributed Lag model (ARDL) was used (bounds testing approach).
The study’s major results revealed that in Algeria, there is a long-term association between state and private investment and economic growth.
The variables are stationary at the level and at the first difference, according to the results of the Augmented Dickey Fuller unit root test (ADF). Furthermore, the cointegration test revealed that the variables are cointegrated and, as a result, have the capacity to move together throughout time.
Private investment is highly connected to economic growth, according to the parsimonious error correcting process. According to the findings, a 1% rise in the current value of private investment promotes economic development by 0.09 percent on average. Similarly, the value of government investment is linked to economic development. In Algeria, a 1% increase in public investment boosts growth by 0.05 percent on average.
The error correction term (ECM) is negative and substantial (-0.54), implying that 54 percent of the disequilibrium will be corrected yearly, according to the outcomes of short-run dynamics.

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