Selected Macroeconomic Variables Affecting Private Investment in Malawi
AbstractThis study provides an empirical test of the macroeconomic variables that can potentially affect private investment decisions in Malawi in a short and long run perspective using time series data. Both the theory and the empirical literature are reviewed in order to identify a private investment function for the last three decades (1979-2009). The results reveal that investment decisions seem to be determined by public investment, bank credit to the private sector and the real interest rate in the short run. Besides, there is evidence of a crowding-out effect of public investment. In the long run, the capital accumulation path seems to be closely dependent on both GDP growth and real exchange rates.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 40698.
Date of creation: 19 Mar 2012
Date of revision:
Co-integration; Crowding-out; Error Correction Model; Malawi; Private investment;
Find related papers by JEL classification:
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
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