Determinants of Private Investment in Economic of Libya

Abstract

   This paper provides empirical evidence about the important determinants affect the private investment in  the Libyan economy over the period (1980-2010 ). The results obtained by employing econometric technique Fully Modified OLS showed an existence of positive relationship between Non-oil GDP and private investment .This result support the Accelerator hypothesis.                                                         

Besides; the findings indicate to an existence of negative relationship between public and private investment. This result support Crowding-Out Hypothesis. Furthermore; the results suggest that inflation and exchange rate have negative impact on private investment. This result show support to the case of uncertainty and economic instability.  

Key words:  private investment, Libyan economy, accelerator, crowding out, inflation, exchange rate, ARDL approach.