The Contribution Of Equipment Leasing In The Error-Correction Model Of Investment In Machinery And Equipment: Evidence From Italy
AbstractSeveral studies have shown a positive correlation between investment in machinery and equipment and economic growth. For this reason, it is very important for policy-makers to study the dynamics of investments and their expected evolution over time through forecast scenarios. The paper aims to present an error-correction model of investment in machinery and equipment at current price with a focus on the contribution of equipment leasing. The main empirical results of the model with equipment leasing as exogenous show that the variable explains 96% of the investment variability and, that as leasing grows by 1 percentage point, investment grows by 0.3%; the elasticity is reduced to 0.2 in the model with all the exogenous variables taken into account (equipment leasing, demand (defined as sum of consumptions and exports), long-term interest rate and industrial production index).
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Bibliographic InfoArticle provided by Euro-American Association of Economic Development in its journal Applied Econometrics and International Development.
Volume (Year): 9 (2009)
Issue (Month): 2 ()
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Web page: http://www.usc.es/economet/eaa.htm
Find related papers by JEL classification:
- C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
- C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
- C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
- E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
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