Bound cointegration test on private investment’s equation: evidence from saudi economy

• Hassan B. Ghassan ^[1] ; Hassan R. ALHAJHOJ ^[1]
  1. [1] King Faisal University

     King Faisal University

     Arabia Saudí

     
• Localización: Applied econometrics and international development, ISSN 1578-4487, Vol. 12, Nº. 1, 2012, págs. 128-140
• Idioma: inglés
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• Resumen

  • This paper investigates the long-run equilibrium relationship between the real private and public investment in Saudi Arabia by using ARDL cointegration tests. The finding shows the stable long-run relation between private investment and public investment. The results indicate that the disequilibrium is largely corrected and converges back to the equilibrium in one year and four months, with a speed of adjustment at rate of about 75 per cent a year. This result supports that the Saudi economy is resilient against the shocks.