Economic Growth and Construction Industry in Libya
- Literature review
- Economic model and Methodology
- Engle-Granger co-integration
- Causality relationship in the short run and in the long run
The sector of construction is ranked as a vital factor that influences policies of the economy in countries that are still developing like Libya. The sector entails backward and forward linkages with various sectors of the economy. In other words, they are dependent on each other. Countries like Libya use construction firms have regulators or control gadgets. That is they cut on the number of projects of construction and reduce funds strengthening this sector when economies approach a rapid pace of growth; and revive the sector of construction when there is a shortage of demand experienced as the rate of unemployment increases(Lopes, 1998). These fluctuations that occur frequently in the level of demand are vital for growth of an economy. Construction firm has taken an important role in transition of the economy from stagnated economy to a growing economy by creation of employment and utilization of inputs. Construction firms in Libya act as a driving sector that has networked and related to many industries in the same sector.Inthe analysis of production, in the sectors of production, the input share supplied by other sectors is over 50% in the calculation and additional value is below 50% in the value of production.
The classification of world economic output of countries is in three main groups: developed economies, developing economies and middle income. In Libya construction sector unveils as a vital factor influencing policies in her economy. The present work study gives an analysis on relationship amongst items of growth and GDP within 1986 to 2008 duration in Libya. The study is different from literature studies. This is so because, compared to literature, it studies more than one group.
[...] In Libya construction sector unveils as a vital factor influencing policies in her economy. The present work study gives an analysis on relationship amongst items of growth and GDP within 1986 to 2008 duration in Libya. The study is different from literature studies. This is so because, compared to literature, it studies more than one group. Literature review It is highlighted a significant proportion is formed by international construction of the total volume of the globe and has effects on construction firms globally. [...]
[...] Bibliography Hillebrandt, P.M Economic Theory and the Construction Industry. 1st ed. Basingstoke: MacMillan. Kermers, J.J.M., Ericsson, N. Dolado, J.J The power of cointegration tests. Oxford Bulletin of Economics and Statistics. Lopes, J The construction industry and macro economy in Sub-Saha ran Africa post 1970, Construct. Manage. Econ . [...]
[...] By the use of this method, a unit root test is worked out as shown below And With finding out of the regression residuals of the previous two equations, the stationary test will be as follows: and Where t represents time and the first two equations are drift terms. n is the number of time lags. Engle?Granger co-integration This test was applied to determine if there exists a series co-integration. Its common aim is to estimate and model long term causality among series that are non-stationary (Kermers et al., 1992). They used to analyse relationships that are equilibrium between series. [...]
[...] Opportunities are provided for integration of both short term and long term regression relationships. This model of correction of error is preferred for estimation where there is a statistical relationship two time series that are integrated. This mode, however, is powerful; it allows the estimation of both long and short run effects of variables that explain time series by analysts. Granger causality If a series Y and X are singly and co-integrated, it means that Granger Causality tests might use the first data as estimation properties of super consistency. [...]