The effects of gross fixed capital formation on economic growth with both a SVAR and BVAR models: a case study of Guatemala

Resumen

The contribution of physical capital to economic growth has been studied since the seminal paper of Solow (1956). It is one of the main factors which explained the pattern of economic growth in a region or country. The previous literature has used both time series and panel data models to verify this relationship between the former and the latter. In this study, a Structural Vector Autoregressive (SVAR) and a Bayesian Vector Autoregressive (BVAR) model are estimated with annual data spanning the period 1962 - 2022. The research considers economic and institutional variables as control variables and finds empirical evidence of the contribution of gross fixed capital formation to economic growth with both models.

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