DOMESTIC INVESTMENT IN THE AGRICULTURAL SECTOR AND ECONOMIC GROWTH IN TUNISIA

Abstract

Our aim in this paper is to investigate the nexus between agricultural investment and economic growth in Tunisia. We compiled annual data for the period from 1965 to 2016 and we adopted an empirical methodology based on the cointegration analysis and on Vector Error Correction Models. In the long run, our results show a positive unidirectional causality from agricultural investment to economic growth and a negative one from other investments to economic growth. In the short run, Granger tests identify only a bidirectional causality between other investments and economic growth. These results confirm that investment in agriculture is conductive for economic growth in Tunisia and justifies the adoption of sound policies to encourage this sector.