The study of good current affairs regarding the public investment, private and Economic Growth in Iran

In this paper, the impact of good current affairs in gross fixed capital formation of the public sector on other economic variables is examined. Because of the importance of the subject, the present article examines the relationship between government investment expenditures, private sector investment and other related macroeconomic variables with economic growth using 1959- 2007 time series. For examining the long run and short run relationships between model variables, the auto regression approach with distributed lag (ARDL) and the standard Granger causality relationship has been used. According to causality relationship, there is a Granger causality relationship between the increased costs of private consumption with economic growth in the long run and the short run. Also, research findings show that there are both in long run and short run a two side negative Granger causality relationship between private sector consumption expenditures and government sector investment expenditures. Finally, no causality relationship was found between government sector investment expenditures and private sector investment expenditures.