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The Relationship Between Growth and Investment

Author

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  • B Bhaskara Rao

    (University of the South Pacific)

Abstract

This paper utilizes the growth accounting framework to derive and analyze the relationship between the rate of growth of output and the ratio of investment to output. With plausible parametric assumptions this framework is used to examine the recent controversy in Fiji on investment and growth. Our results support the concerns of some USP economists that a 5% growth rate for Fiji needs significantly higher investment rates and institutional reforms.

Suggested Citation

  • B Bhaskara Rao, 2005. "The Relationship Between Growth and Investment," Macroeconomics 0511014, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpma:0511014
    Note: Type of Document - pdf; pages: 15
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/mac/papers/0511/0511014.pdf
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    References listed on IDEAS

    as
    1. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
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    More about this item

    Keywords

    Investment ratio; Growth targets; Growth accounting; Total Factor Productivity.;
    All these keywords.

    JEL classification:

    • E - Macroeconomics and Monetary Economics

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