Version 1
: Received: 27 February 2024 / Approved: 29 February 2024 / Online: 29 February 2024 (16:59:00 CET)
How to cite:
Mohammed Gasmelsied Ahmed, M. Analyzing GDP Growth Drivers in Saudi Arabia: Investment or Consumption: An Evidence-Based ARDL Bound Test Approach. Preprints2024, 2024021755. https://doi.org/10.20944/preprints202402.1755.v1
Mohammed Gasmelsied Ahmed, M. Analyzing GDP Growth Drivers in Saudi Arabia: Investment or Consumption: An Evidence-Based ARDL Bound Test Approach. Preprints 2024, 2024021755. https://doi.org/10.20944/preprints202402.1755.v1
Mohammed Gasmelsied Ahmed, M. Analyzing GDP Growth Drivers in Saudi Arabia: Investment or Consumption: An Evidence-Based ARDL Bound Test Approach. Preprints2024, 2024021755. https://doi.org/10.20944/preprints202402.1755.v1
APA Style
Mohammed Gasmelsied Ahmed, M. (2024). Analyzing GDP Growth Drivers in Saudi Arabia: Investment or Consumption: An Evidence-Based ARDL Bound Test Approach. Preprints. https://doi.org/10.20944/preprints202402.1755.v1
Chicago/Turabian Style
Mohammed Gasmelsied Ahmed, M. 2024 "Analyzing GDP Growth Drivers in Saudi Arabia: Investment or Consumption: An Evidence-Based ARDL Bound Test Approach" Preprints. https://doi.org/10.20944/preprints202402.1755.v1
Abstract
This study delves into the intricate interplay of economic growth components, specifically focusing on Consumption and investment in Saudi Arabia from 2000 to 2022. Employing vector error correction models and cointegration techniques, we analyze the short- and long-term dynamics within the relationship of Consumption, investment, and economic growth. Granger causality analysis is also used to discern these pivotal variables' causal connections. Our empirical analysis reveals a persistent long-term cointegration relationship among the variables, underscoring the enduring nature of their interdependency. Furthermore, our findings highlight Consumption and investment's statistically significant positive impact on economic growth. Notably, the short-term analysis unveils a stable model characterized by an annual adjustment to equilibrium of 100%.Moreover, the Granger causality study demonstrates unidirectional causal linkages between Consumption, investment, and economic growth. These findings hold substantial implications for policy formulation in Saudi Arabia. Policymakers must grasp the ramifications of burgeoning prosperity and evolving private consumption patterns on future environmental outcomes. Achieving sustainable long-term results necessitates equal emphasis on bolstering private Consumption and fostering other facets of economic growth.
Keywords
Gross Domestic Product (GDP), Consumption, Investment, Saudi Arabia
Subject
Business, Economics and Management, Economics
Copyright:
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
