Domestic Investment and Economic Growth in Tunisia

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Causality, trends and challenges

This book has examined the link between domestic investment and economic growth in Tunisia.

To achieve this objective, annual data for the period between 1965 and 2016 were used and tested based on Johansen cointegration analysis and the vector error correction model.

According to the results of the analysis, it has been determined that there is a two-way negative relationship between domestic investment and long-term economic growth.

However, and based on the results of the Granger causality test, we noted the existence of a one-way causality relationship ranging from domestic investment to short-term economic growth.

These results prove that domestic investments are not considered as a source of economic growth in Tunisia during this long period and suffer from many problems and a poor economic strategy.

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