An investigation of Capital formation and its economic determinants in Iran

Subject Areas : Applied Economics

اکبر  کمیجانی ¹ (ندارد)
ابوطالب  شالچیان ² (ندارد)

Received: 2009-08-05 Accepted : 2010-03-15 Published : 2010-06-22

Keywords: Private investment, Inflation Rate, weighted average of rate of re, effective exchange rate, and government investment,

Abstract :

This paper attempts to analyze the role of the main determinants of the capital formation and the behavior of private investment using the descriptive as well as econometric methods. Both the econometric methods and statistical analysis are indicating that most of the macroeconomic variables do play significant role in explaining the behavior of private investment in Iran. Variables examined for their influence on private investment over the period under study i.e. 1350-1383[1] are as follows: GDP, inflation rate, weighted average of the rate of return on long term deposits, government investment, effective exchange rate and the changes in the banking facilities to private sector.  The findings in this paper indicate that Most of these variables, except the rate of return on banking facilities, have had the significant impact on private investment in the same direction as expected