International Journal of Humanities and Social Science

ISSN 2220-8488 (Print), 2221-0989 (Online) 10.30845/ijhss

Joint Impact of Investment (Public and Private) On the Economic Growth of Pakistan: (Co-Integration Approach)
Goher Fatima

The purpose of this study is to find out the joint impact of public and private investment on economic growth of Pakistan in short run and long run time period. For this purpose co integration and error correction model is applied covering 1975-2010 time period. Results shows that in the long run private investment has positive and significant impact on economic growth where as in the short run it has positive but insignificant impact on economic growth and public investment has positive and significant impact on economic growth both in short run and long run. Private investment has a stronger, more favorable effect on growth rather than public investment, probably because private investment is more efficient and less closely associated with corruption. Along with public and private investment the other important variables like Real interest rate government revenue and aid also effects economic growth. Government development expenditures must be improved, to minimize the cost of production of private sectors which increase the profitability of the investors.

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