Estimates of Private Investment Equation, 1977–94
(Dependent variable: private investment/GDP)1
|Government financing constraint3||–0.81||0.18||–4.49|
|Official reserves (in months of imports)||1.94||0.53||3.68|
|Real exchange rate (percent change)||–0.23||0.10||–2.25|
|Summary and diagnostic statistics5|
|Number of observations||18.00|
|Breusch-Godfrey Test for AR(I) errors6||1.77||(0.18)|
|Breusch-Pagan Test for heteroscedasticity6|
|From workers1 remittances||4.91||(0.03)|
|From government financing constraint||1.18||(0.28)|
|EngleTest for ARCH errors6||1.11||(0.29)|
Private investment was constructed from gross fixed investment less central government capital expenditure.
Standard errors were computed using White’s heteroscedasticity-consistent variance-covariance matrix estimator.
The government financing constraint is defined as central government capital expenditure in relation to GDP less central government external financing in relation to GDP.
Excluding foreign grants.
p-values shown in parentheses.
χ2 test with one degree of freedom.