Relationship between Private Investment-GDP Ratio and Economic Growth during COVID-19

10 Pages Posted: 2 May 2022

See all articles by A R Tahseen Jahan

A R Tahseen Jahan

University of Dhaka, Department of Development Studies

Rassiq Aziz Kabir

Department of Economics, University of Dhaka

Date Written: May 1, 2022

Abstract

In this paper, we have tried to find if there exists a relationship between GDP growth rate in percentage, which is taken as a dependent variable, and Private Investment-GDP ratio expressed in percentage, which is taken as an independent variable. Based on the results from the analysis, we have tried to draw conclusions. The regression has been done considering the year 2020 with the data of 14 countries, although the unavailability of data of many countries might have affected the regression analysis results.

Most researchers conclude that a positive correlation exists between private investment and GDP growth in a country. However, we have found a completely different perspective when the data of only one year is taken; we have seen from the paper that there is no linear relationship between the two variables when Cross-section data of only one year, 2020 for this specific case, is being taken.

One of the principal reasons behind the lack of a linear relationship might be that in 2020, the Coronavirus pandemic was at its peak globally, which had a significantly detrimental impact on the overall economic situation of the world.
Many countries that have had substantial growth due to private investments were not included due to the unavailability of the data for the specific year, which might have resulted in a conclusion.

Keywords: Private Investment, GDP growth, Correlation, Linear

Suggested Citation

Jahan, A R Tahseen and Aziz Kabir, Rassiq, Relationship between Private Investment-GDP Ratio and Economic Growth during COVID-19 (May 1, 2022). Available at SSRN: https://ssrn.com/abstract=4098093 or http://dx.doi.org/10.2139/ssrn.4098093

A R Tahseen Jahan (Contact Author)

University of Dhaka, Department of Development Studies ( email )

Bangladesh

Rassiq Aziz Kabir

Department of Economics, University of Dhaka ( email )

Bangladesh

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