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A Cointegration Analysis of Investment Output Ratio in Bangladesh

Author

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  • Anoruo, Emmanuel
  • Kumar, Saten
  • DiPietro, Bill

Abstract

In this article, we have estimated a neo-classical model of investment augmented with real rate of interest to proxy the user cost of capital for Bangladesh. Our results reveal that there is a equilibrium relationship between investment output ratio, real output and real rate of interest. The long run relationship persists even in the presence of structural breaks in the model.

Suggested Citation

  • Anoruo, Emmanuel & Kumar, Saten & DiPietro, Bill, 2007. "A Cointegration Analysis of Investment Output Ratio in Bangladesh," MPRA Paper 19338, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:19338
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    References listed on IDEAS

    as
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    4. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-1580, November.
    5. Evan Lau & Ahmad Zubaidi Baharumshah, 2003. "Sustainability of External Imbalances: The Case of Malaysia," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 48(01), pages 61-80.
    6. Bernanke, Ben S, 1983. "The Determinants of Investment: Another Look," American Economic Review, American Economic Association, vol. 73(2), pages 71-75, May.
    7. Wu, Jyh-lin, 1998. "Are budget deficits "too large"?: The evidence from Taiwan," Journal of Asian Economics, Elsevier, vol. 9(3), pages 519-528.
    8. Oshikoya, Temitope W, 1994. "Macroeconomic Determinants of Domestic Private Investment in Africa: An Empirical Analysis," Economic Development and Cultural Change, University of Chicago Press, vol. 42(3), pages 573-596, April.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Investment Output Ratio; Johansen Maximum Likelihood Method; Gregory Hansen Structural Break tests;
    All these keywords.

    JEL classification:

    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • P41 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Planning, Coordination, and Reform
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • R34 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Input Demand Analysis

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