Article Sidebar
Published:
Jan 15, 2025Keywords:
Article Details
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
(i) AJER is an open-access journal. This means that all content is freely available to all. The author retains the copyrights associated with their work within AJER’s policy framework.
(ii) All articles can be accessed freely without any limitations of use, distribution, and reproduction in any medium so long as they are expressly cited.
(iii) The use of general descriptive names, trade names, trademarks, and so forth in this publication, even if not specifically identified, may not mean that these names are not protected by the relevant laws and regulations in their respective countries.
(iv) The publisher believes that all information is true and accurate at the time of going to press. In this regard, the authors, editors, and publishers cannot accept any legal responsibility for any errors, typos or omissions that may be made. There is thus no warranty for the materials contained in the articles.
Main Article Content
Effect of Gross Capital Formation on the Economic Growth in Tanzania: A Vector Error Correction Model Analysis
James Daniel Chindengwike
Abstract
The goal of this research was to investigate the influence of gross capital formation on economic growth in Tanzania. Neoclassical Growth Model was used in this study. The quantitative research approach was used in this study. This study adopted a longitudinal research design, while a documentary review was employed to get secondary data from specific sites. The analysis relied on secondary data on private and public investment. Following the determination of the model's assumptions, a Vector Error Correction Model (VECM) was used. Because the data were presented in the form of a time series, stationarity was investigated. This was followed by a unit root test, then a cointegration test. Consideration is given to validity, reliability, and ethical considerations. The study revealed that there is positive association between gross capital formation and economic growth in Tanzania, also the study revealed that there is positive association between government consumption expenditure and economic growth in Tanzania. The study concluded that the economic growth is significantly impacted by gross capital formation. The study recommends that the government should focus more on the implementation and development of policies and strategies pertaining to the fees and charges paid to the government at all administrative levels. It also suggests that penalties be imposed in order to increase capital formation for private and public companies.
