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Does the gross fixed capital formation represent a factor for supporting the economic growth?

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  • Gibescu, Octavia

Abstract

The present study aims to show an analysis of relationship between gross fixed capital formation and economic growth in Romania, Bulgaria, Czech Republic, Poland and Hungary for the period 2003-2009. For this, the statistical connection analysis method is applied. The used variables are: the economic growth (gross domestic product - GDP) – considered dependent variable and the gross fixed capital formation (GFCF) – considered independent variable. This workpaper uses the quarterly of GDP and GFCF, considering the period from the last quarter of 2003 until the last quarter of 2009. That analysis indicates the relation between those two indicators separately for each country in order to draw a conclusion regarding the role of GFCF to the growth and development of the Central and Eastern Europe (CEE) countries and as well as its contribution to the formation of GDP. Using this data, we apply the correlation analysis to verify the existence of the connection between two macroeconomic indicators. The obtained results show a direct and strong connection between economic growth and gross fixed capital formation, relation which is expressed by correlation coefficient with a level very close to the value of 1 for Romania, Bulgaria, Czech Republic and Poland. The conclusion is that the level of the between gross fixed capital formation may influence in the positive way the economic growth, in Romania, Bulgaria, Czech Republic and Poland.

Suggested Citation

  • Gibescu, Octavia, 2010. "Does the gross fixed capital formation represent a factor for supporting the economic growth?," MPRA Paper 50135, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:50135
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    File URL: https://mpra.ub.uni-muenchen.de/50135/1/MPRA_paper_50135.pdf
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    References listed on IDEAS

    as
    1. Jula, Dorin & Jula, Nicoleta, 2000. "The Romanian Regions Competitiveness," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 90-99, December.
    2. Antoniade-Ciprian ALEXANDRU & Nicoleta CARAGEA, 2011. "Financial Crisis from the Trust and Loss Aversion Perspective in Emerging Romanian Capital Market," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(7(560)), pages 101-110, July.
    3. repec:cmj:journl:y:2013:i:27:alexandruc,caragean,dobream is not listed on IDEAS
    4. Caragea, Nicoleta & Alexandru, Ciprian Antoniade & Dobre, Ana Maria, 2012. "Bringing New Opportunities to Develop Statistical Software and Data Analysis Tools in Romania," MPRA Paper 48772, University Library of Munich, Germany.
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    Cited by:

    1. Afolabi Tunde Ahmed & Imran Ur Rahman, 2020. "The Impact of FDI and Foreign Aid on the Economic Growth: Empirical Evidence from Sub-Saharan African Countries," International Journal of Science and Business, IJSAB International, vol. 4(6), pages 53-70.
    2. Sumbal Shahid & Rana Ejaz Ali Khan, 2020. "Informal Sector Economy, Child Labor and Economic Growth in Developing Economies: Exploring the Interlinkages," Asian Development Policy Review, Asian Economic and Social Society, vol. 8(4), pages 277-287, December.

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    More about this item

    Keywords

    macroeconomics; growth; gross fixed capital formation; gross domestic product; the correlation;
    All these keywords.

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution

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