The Peculiarities of Capital Investment in the Baltic States

Abstract

-The paper presents the results from the research on capital investment changes in the context of economic development in the Baltic States. Statistical data analysis and cross-correlation analysis were used. The research showed that the volatility of real GDP growth and real investment growth was very high in the Baltic States compared with the EU countries average during the period of 2000 -2011. Higher investment growth provides a higher economic growth, but it may be associated with higher volatility of investment and economic growth. The share of government investment was high in the Baltic States compared with the EU countries average, but the government investment did not have stabilizing impact on the economy because of the procyclical manner and high volatility.