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Bound Cointegration Test on Private Investment’s Equation: Evidence from Saudi Economy

  • Hassan B. GHASSAN
  • Hassan R. ALHAJHOJ

This paper investigates the long-run equilibrium relationship between the real private and public investment in Saudi Arabia by using ARDL cointegration tests. The finding shows the stable long-run relation between private investment and public investment. The results indicate that the disequilibrium is largely corrected and converges back to the equilibrium in one year and four months, with a speed of adjustment at rate of about 75 per cent a year.This result supports that the Saudi economy is resilient against the shocks.

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Article provided by Euro-American Association of Economic Development in its journal Applied Econometrics and International Development.

Volume (Year): 12 (2012)
Issue (Month): 1 ()
Pages:

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Handle: RePEc:eaa:aeinde:v:12:y:2012:i:1_10
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