Uncertainty of government's current expenditures and development expenditures and private investment: evidence from Iran Online publication date: Fri, 28-Feb-2014
by Leila Ahmadi; Roghayeh Torki Samaei
African J. of Economic and Sustainable Development (AJESD), Vol. 2, No. 4, 2013
Abstract: This study investigates the effect of uncertainty of government's current expenditures and development expenditures on private sector investment in Iran during 1959 to 2010. Inflation rate and GDP are considered as explanatory variables in this study. Co-integration and vector error-correction models are used to obtain the estimates of the co-integrating relations and the long-run dynamics, respectively. The uncertainty measure generated from generalised autoregressive conditional heteroscedastic [EGARCH (0, 1)' process. The results show that both uncertainty of government's current expenditures and development expenditures have significant negative effect on private investment in the long run while in the short run, uncertainty of current government expenditures has no significant effect on private sector investment but uncertainty of development government expenditures causes private investment to increase. The effect of inflation and GDP are negative and positive respectively both in the long run and in the short run.
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the African J. of Economic and Sustainable Development (AJESD):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com