Analysis of the Effect of Public and Private Investment on Economic Well-being in Iran during 5 Decades

Abstract

Well-being cannot be separated from several factors including economic growth, investment and government spending. Studies conducted by previous researchers show contradictory results in the relationship between investment and well-being. In this research, Iran's economic well-being was calculated by focusing on the four dimensions of consumption flow, wealth stocks, income distribution and economic security in the period from 1350 to 1401, which has an average of 41.3 in the research period. Then, the effect of public and private investment on economic well-being was investigated and tested with the autoregressive distributed lag approach. The moving trend of the Economic well-being index shows that economic well-being has had a downward trend since 1355 until the end of the war, and after that, in the long term, it has started an upward trend with numerous fluctuations. The findings of the long-term estimation of the model indicate that public and private investment has a positive effect on economic well-being, and in terms of size, the impact of public investment on well-being is far more than that of private investment. Also, according to the expectation, per capita income and economic growth have a positive effect on well-being, and inflation has a negative effect on it. In general, although public investment has a greater favorable effect on economic well-being than private investment; But the size of its favorable effect on welfare is less than the unfavorable effect of inflation. According to the results, it is suggested that the economic policymaker should avoid inflationary methods in order to finance investment while controlling and reducing inflation.

Keywords

• economic well-being
• public and private investment
• ardl
• iran