An Economic Growth Analysis of Singapore

Running head: AN ECONOMIC GROWTH ANALYSIS OF SINGAPORE
An Economic Growth Analysis of Singapore
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1AN ECONOMIC GROWTH ANALYSIS OF SINGAPORE
Table of Contents
1. Introduction............................................................................................................................3
1.1 Background of the study..................................................................................................3
1.2 Problem statement............................................................................................................3
1.3 Research aim....................................................................................................................3
1.4 Data source.......................................................................................................................3
1.5 Research question.............................................................................................................4
2. Literature Review...................................................................................................................4
2.1 Relationship between growth of GDP per capita and growth of population...................4
2.2 Relationship between growth of GDP per capita and real interest rate...........................4
2.3 Relationship between growth of GDP per capita and inflation........................................5
2.4 Relationship between growth of GDP per capita and export...........................................5
2.5 Relationship between growth of GDP per capita and FDI...............................................5
3. Empirical Analysis.................................................................................................................6
3.1 Econometric Model..........................................................................................................6
3.2 Descriptive statistics.........................................................................................................6
3.3 Interpretation of estimated parameters.............................................................................7
3.3 Regression analysis..........................................................................................................7
4. Hypothesis Testing.................................................................................................................9
5. Multicolinearity....................................................................................................................11
5.1 Simple Correlation Coefficient......................................................................................11
5.2 Variance Inflation Factor...............................................................................................12

2AN ECONOMIC GROWTH ANALYSIS OF SINGAPORE
6. Conclusion............................................................................................................................12
7. Reference..............................................................................................................................14

3AN ECONOMIC GROWTH ANALYSIS OF SINGAPORE
1. Introduction
1.1 Background of the study
Economic growth of a country is defined as the growth of per capita gross domestic
product. Growth of per capita gross domestic product can be interpreted by the growth rate of
population, interest rate, inflation (consumer price index), foreign direct investment and
export of the country. The average gross domestic product for an individual of an economy
depends on the fiscal policy and monetary policy to control the economy by raising the GDP,
allocating money and time to achieve the targeted level of GDP. The availability of resources
reflects the economic growth. Economic growth can be measured by the growth of GDP per
capita.
1.2 Problem statement
The interest rate is one of the crucial factors that can determine the per capita GDP
growth (Semuel and Nurina 2015). Population is used to define the per capita GDP so the
growth rate of population is also an important factor. Foreign direct investment is another
factor which is significant in measuring the economic growth (Iamsiraroj and Ulubaşoğlu
2015). The inflation rate can influence the economic growth negatively (Aghion et al. 2017).
The above mentioned research results confirms that the economic growth depends on real
interest rate, inflation and foreign direct investment.
1.3 Research aim
The research is focused towards the influences of the variable on the economic
growth of Singapore. The variables are inflation, population growth rate, real interest rate,
foreign direct investment and export of Singapore.