—Based on the neoclassical growth model of Solow
(1956), this study analyses the macroeconomic determinants of
economic growth, examining the effect of public and private
investment on economic growth in Iraq from 1970 to
2010.Cointegration and error correction models were applied to
the time series data, followed by a Johansen cointegration test of
trace and maximum eigenvalue statistics to establish long run
equilibrium relationships among the variables in the model.
This study also estimated an error correction model (ECM) and
the significance of the coefficient on the error correction term
confirms the long run relationship between the explanatory
variables and economic development. The empirical results
suggest that, in the long run, private investment, public
investment, growth in the labour force and growth in oil
revenues effect real gross domestic product (GDP) positively
and statistically significantly; however, price and exchange rate
volatility are found to have an adverse impact on real GDP. In
light of these results, several policy recommendations are made
—Economic development, Iraq, private and
public investment, cointegration.
The authors are with the Plymouth University School of Business and
Management, UK(e-mail: email@example.com,
Cite: Jwan Hussein and James Benhin, " Public and Private Investment and Economic Development
in Iraq (1970-2010)," International Journal of Social Science and Humanity vol. 5, no. 9, pp. 743-751, 2015.