Financial Variables Effect on the U.S. Gross Private Domestic Investment (GPDI) 1959-2001

TL;DR

This study analyzes how US stock and money markets influenced Gross Private Domestic Investment from 1959 to 2001, using a multiple linear regression model to explore financing behaviors of companies and individuals.

Contribution

It introduces a multiple linear regression model to quantify the impact of stock and money markets on US private investment over four decades.

Findings

Stock market and money market variables significantly correlate with GPDI.

The regression model explains a notable portion of GPDI variation.

Financial market indicators can predict private investment trends.

Abstract

I studied what role the US stock markets and money markets have possibly played in the Gross Private Domestic Investment (GPDI) of the United States from the year 1959 to the year 2001, Gross Private Domestic Investment refers to the total amount of investment spending by businesses and firms located within the borders of a nation. It includes both the values of the purchases of non-residential fixed investment, which include capital goods used for production, and the values of the purchases of residential fixed investment, which include construction spending for factories or offices. And I created a Multiple Linear Regression Model of the GDPI. To see if companies and private citizens use the stock market and money markets as a way of financing capital projects (business ventures, buying commercial and noncommercial property, etc). Keywords: Gross Private Domestic Investment, Pearson Correlation, SP 500, TB3