The Effect of Investment in Transportation On Economic Growth of IRAN

This paper investigates the relationship between public investment in transportation and economic growth using cointegration approach over 1959 to 2005. There is, however, conflicting evidence in the literature regarding the question as to how the composition of government expenditure affects economic growth. In particular, on the relationship between public investment in transportation (infrastructure) and economic growth, there has been a mixed picture. We find that there is a long run relationship between investment in transportation and economic growth and its impact is positive. In comparison with earlier studies, our estimated coefficients are exact.