Granger Causal Linkages Between Economic Growth and Fixed Capital Formation in South Africa: A Frequency Domain Analysis

Authors : Fela ÖZBEY

Pages : 225-234

Doi:10.18506/anemon.1333770

View : 81 | Download : 36

Publication Date : 2023-09-30

Article Type : Research Paper

Abstract :The purpose of this study is to examine the Granger causal linkages between gross fixed capital formation insert ignore into journalissuearticles values(GFCF); growth and economic growth in South Africa. To provide a more comprehensive analysis of the Granger causality insert ignore into journalissuearticles values(GC); relationships between these macroeconomic indicators, this study investigates these causalities in the frequency domain. The methodology is based on decomposing time series into weighted sinusoidal components and performing separate GC tests for each component. Test results reveal that there is feedback between capital formation and economic growth in South Africa in the frequency domain, even at the 1% significance level. Furthermore, the test results indicate that the GC from fixed capital formation to economic growth is detected in lower frequencies compared to the GC from economic growth to capital formation. This means that the severity of the GC from economic growth to capital formation is stronger than the reverse direction GC in South Africa.
Keywords : Frekans Alanında Granger Nedensellik, Hodrick Prescott Filtresi, Bootstrap, Ekonomik Büyüme, Sermaye Oluşumu

ORIGINAL ARTICLE URL