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Trends in the Interest Rate - Investment - GDP Growth Relationship

Author

Listed:
  • Albu, Lucian Liviu

    (Institute of Economic Forecasting, Bucharest.)

Abstract

In the last years it seemed that the Romanian economy leading up to access to the EU was going to enter a new stage, evolving more and more in line with the standard theory. Based on more accurate statistical data for the last years, we try to verify some hypotheses used in the standard economic literature. Also, applying few simple models derived from the standard ones in our experiment we estimated their parameters in the case of Romania in order to obtain an image of the trends in the next period. The two main partial models are referring to the impact of investment on GDP growth rate and to the relation between the interest rate and investment, respectively. Moreover, an equation including inflation dynamics was taken into account. Beginning in 1998, the behaviour of the national economic system and the interest rate - investment - economic growth relationship tend to converge to those demonstrated in a normal market economy and presented in the specialised literature.

Suggested Citation

  • Albu, Lucian Liviu, 2006. "Trends in the Interest Rate - Investment - GDP Growth Relationship," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 3(3), pages 5-13, September.
    • Handle: RePEc:rjr:romjef:v:3:y:2006:i:3:p:5-13
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    File URL: http://www.ipe.ro/rjef/rjef3_06/rjef3_06_1.pdf
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    References listed on IDEAS

    as
    1. Barro, Robert J, 1989. "The Ricardian Approach to Budget Deficits," Journal of Economic Perspectives, American Economic Association, vol. 3(2), pages 37-54, Spring.
    2. Albu, Lucian Liviu, 2008. "Strain and Inflation-Unemployment Relationship in Transitional Economies: A theoretical and empirical investigation," Working Papers of Institute for Economic Forecasting 081103, Institute for Economic Forecasting.
    3. Albu, Lucian Liviu, 2002. "Sustainability Function," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 5-14, June.
    4. Nicolas Carnot & Vincent Koen & Bruno Tissot, 2005. "Economic Forecasting," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-00581-5, December.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Daniel DUMITRESCU & Mădălina Gabriela ANGHEL & Constantin ANGHELACHE, 2015. "Analysis Model of GDP Dependence on the Structural Variables," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(4(605), W), pages 151-158, Winter.
    2. Savoiu, Gheorghe & Dinu, Vasile & Ciuca, Suzana, 2013. "Foreign Direct Investment based on Country Risk and other Macroconomic Factors. Econometric Models for Romanian Economy," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 39-61, March.
    3. repec:agr:journl:v:4(605):y:2015:i:4(605):p:153-158 is not listed on IDEAS
    4. ALBU, Lucian Liviu, 2015. "Investment And Economic Growth On Medium And Long Term," Journal of Financial and Monetary Economics, Centre of Financial and Monetary Research "Victor Slavescu", vol. 2(1), pages 2-14.
    5. Chiriluş Alexandru I., 2022. "Interest Rates and Economic Growth in Romania: Is There Cointegration?," Journal of Social and Economic Statistics, Sciendo, vol. 11(1-2), pages 132-143, December.
    6. Altar, Moisa & Necula, Ciprian & Bobeica, Gabriel, 2008. "Modeling The Economic Growth In Romania. The Influence Of Fiscal Regimes," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 5(4), pages 146-160, December.
    7. Błażejowski, Marcin & Gazda, Jakub & Kwiatkowski, Jacek, 2016. "Bayesian Model Averaging in the Studies on Economic Growth in the EU Regions – Application of the gretl BMA package," MPRA Paper 89366, University Library of Munich, Germany, revised Oct 2016.
    8. Altar, Moisa & Necula, Ciprian & Bobeica, Gabriel, 2008. "Modeling The Economic Growth In Romania. The Role Of Human Capital," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 5(3), pages 115-128, September.
    9. Jos Mauricio Gil Le n & John William Rosso Murillo & Edgar Alonso Ramirez Hern ndez, 2019. "Public Debt and Stability in Economic Growth: Evidence for Latin America," International Journal of Economics and Financial Issues, Econjournals, vol. 9(4), pages 137-147.
    10. Lucian Liviu Albu, 2014. "A model to estimate macroeconomic parameters for growth in EU," Working Papers of Institute for Economic Forecasting 141222, Institute for Economic Forecasting.

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    More about this item

    Keywords

    Investment Rate; GDP Growth Rate; Interest rate; Depreciation Rate; Contour Plot.;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • P24 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - National Income, Product, and Expenditure; Money; Inflation

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