Drivers of the economic growth for Nicaragua in the period 1990-2017
DOI:
https://doi.org/10.5377/nexo.v36i02.15999Keywords:
Economic growth, extension of the Solow-Swan model, cointegration, NicaraguaAbstract
This paper studies the determinants of economic growth in Nicaragua using annual data for the period 1990-2017. The objective of this study is to determine the factors that influenced economic growth in Nicaragua by estimating an Ordinary Least Squares (OLS) model. It was found that in the long run, a one percent increase in employment is associated with an increase in Gross Domestic Product (GDP) per capita of 0.4 percent; in addition, a one percent increase in schooling could be associated with 0.6 percent in GDP per capita. However, in the short term, the greatest sensitivities are found in the term GDP per capita lagged one period, since a one percent increase in this variable is correlated with a 0.23 percent increase in GDP per capita. Significant variations are also present for changes in public consumption, as a one percent increase in public consumption could be associated with a 0.14 percent increase in GDP per capita.
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