IDEAS home Printed from https://ideas.repec.org/a/rjr/romjef/v3y2006i3p5-13.html

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
    as

    Download full text from publisher

    File URL: http://www.ipe.ro/rjef/rjef3_06/rjef3_06_1.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Albu, Lucian Liviu, 2002. "Sustainability Function," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 5-14, June.
    2. Barro, Robert J, 1989. "The Ricardian Approach to Budget Deficits," Journal of Economic Perspectives, American Economic Association, vol. 3(2), pages 37-54, Spring.
    3. Nicolas Carnot & Vincent Koen & Bruno Tissot, 2005. "Economic Forecasting," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-00581-5, March.
    4. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    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 / Editura Economica, vol. 0(4(605), W), pages 151-158, Winter.
    2. 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.
    3. 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.
    4. repec:agr:journl:v:4(605):y:2015:i:4(605):p:153-158 is not listed on IDEAS
    5. 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.
    6. 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.
    7. 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.
    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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Albu, Lucian-Liviu, 2010. "Scenarios for post-crisis period based on a set of presumed changes in the interest rate – investment – GDP growth relationship," MPRA Paper 32753, University Library of Munich, Germany.
    2. Albu, Lucian-Liviu, 2008. "A simulation model of public debt sustainability," MPRA Paper 11713, University Library of Munich, Germany.
    3. Reiner Eichenberger & David Stadelmann, 2009. "Consequences of Debt Capitalization: Property Ownership and Debt/Tax Choice," CREMA Working Paper Series 2009-08, Center for Research in Economics, Management and the Arts (CREMA).
    4. Xinshen DIAO & Terry L. ROE & A. Erinç YELDAN, 1999. "How Fiscal Mismanagement May Impede Trade Reform: Lessons From An Intertemporal, Multi-Sector General Equilibrium Model For Turkey," The Developing Economies, Institute of Developing Economies, vol. 37(1), pages 59-88, March.
    5. Hany Eldemerdash & Hugh Metcalf & Sara Maioli, 2014. "Twin deficits: new evidence from a developing (oil vs. non-oil) countries’ perspective," Empirical Economics, Springer, vol. 47(3), pages 825-851, November.
    6. BOUNADER, Lahcen, 2016. "Is there a crowding-out effect in the Moroccan context ? Evidence from structural VAR Analysis," MPRA Paper 69275, University Library of Munich, Germany.
    7. Brittle, Shane, 2009. "Ricardian Equivalence and the Efficacy of Fiscal Policy in Australia," Economics Working Papers wp09-10, School of Economics, University of Wollongong, NSW, Australia.
    8. Altin Hoti & Aranit Shkurti & Scheherazade Rehman, 2022. "Impact of External Debt on Economic Growth in Western Balkan Countries," Academic Journal of Interdisciplinary Studies, Richtmann Publishing Ltd, vol. 11, March.
    9. Eregha, Perekunah B. & Aworinde, Olalekan B. & Vo, Xuan Vinh, 2022. "Modeling twin deficit hypothesis with oil price volatility in African oil-producing countries," Resources Policy, Elsevier, vol. 75(C).
    10. António Afonso & José Alves & José Carlos Coelho & Jamel Saadaoui, 2025. "Fiscal and External Sustainability: a Two-Step Time-varying Granger Causality Assessment," Working Papers REM 2025/0369, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    11. repec:spo:wpmain:info:hdl:2441/3l2vounfl99nvqsr0k24sn3k5l is not listed on IDEAS
    12. Bespalova, Olga, 2018. "Forecast Evaluation in Macroeconomics and International Finance. Ph.D. thesis, George Washington University, Washington, DC, USA," MPRA Paper 117706, University Library of Munich, Germany.
    13. Yu Hsing, 2020. "Impacts of Real Depreciation and Appreciation on Aggregate Output in Taiwan," The American Economist, Sage Publications, vol. 65(1), pages 123-130, March.
    14. Nazia Abdul Rehman & Musarrat Shamshir & Khurram Shakir, 2020. "Correlation of Macroeconomic Variables with Twin Deficit in Pakistan," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 16(1), pages 16-11.
    15. Jonathan Labbé, 2016. "Relationship between private and public investors: lever or hindrance to innovation [Relations entre investisseurs privés et publics : levier ou obstacle à l'innovation]," Post-Print hal-03000105, HAL.
    16. Haytham Y.M. Ewaida, 2017. "The Impact of Sovereign Debt on Growth: An Empirical Study on GIIPS versus JUUSD Countries," European Research Studies Journal, European Research Studies Journal, vol. 0(2A), pages 607-633.
    17. Daniel BELINGHER, 2015. "A PVAR MODEL BUILT ON THE RICARDIAN APPROACH TO DEFICITS IN CENTRAL AND EASTERN EUROPE Abstract : In the current times, the issue of the deficits became very problematic for the economists, as well as for the practitioners and theoreticians. The purp," EcoForum, "Stefan cel Mare" University of Suceava, Romania, Faculty of Economics and Public Administration - Economy, Business Administration and Tourism Department., vol. 4(Special I), pages 1-41, august.
    18. Dammann, Felix & Rodosthenous, Neofytos & Villeneuve, Stéphane, 2025. "A Stochastic Non-Zero-Sum Game of Controlling the Debt-to-GDP Ratio," Center for Mathematical Economics Working Papers 730, Center for Mathematical Economics, Bielefeld University.
    19. Roy, Arup, 2023. "Nexus between economic growth, external debt, oil price, and remittances in India: New insight from novel DARDL simulations," Resources Policy, Elsevier, vol. 83(C).
    20. Uryszek Tomasz, 2015. "Long-term Sustainability Of Public Finance In The Central And Eastern EU Member States / Długoterminowe Zrównoważenie Finansów Publicznych w Krajach Europy Środkowej i Wschodniej Należących Do Ue," Comparative Economic Research, Sciendo, vol. 18(4), pages 47-61, December.
    21. Nikolina Kosteletou & Panagiotis Palaios & Evangelia Papapetrou, 2023. "New Evidence on the Asymmetric Linkages Between Fiscal and Current Account Balances," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(4), pages 4145-4169, December.

    More about this item

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rjr:romjef:v:3:y:2006:i:3:p:5-13. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Corina Saman The email address of this maintainer does not seem to be valid anymore. Please ask Corina Saman to update the entry or send us the correct address (email available below). General contact details of provider: https://edirc.repec.org/data/ipacaro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.