MACROECONOMIC STABILITY AND EUROPEAN UNION INVESTMENTS

Abstract

The quantity and quality of investments represent a condition for sustainable and long-term economic growth. Therefore, in economic theory, the rate of economic growth is a function of investment. This research includes an analysis of the impact of selected key macroeconomic indicators (independent variables) on the state and trend of investments in the European Union as a dependent variable. The research covers the period from 2012 to 2021. The following independent variables are chosen: GDP growth rate, interest rate, inflation, unemployment, income from indirect and direct taxes, public debt and budget deficit. The research shows the impact of these variables on the investments of the European Union, the dependent variable. The results of the regression analysis show that interest rates, unemployment, revenues from indirect taxes, as well as the public deficit and public debt have a negative and statistically significant direction in relation to investments. The GDP growth rates as well as direct tax revenues are statistically insignificant, but they have a positive regression coefficient on investments. Inflation rate is also an insignificant variable, but with negative impact on investments. The chosen model in the context of the joint action of all independent variables is statistically significant given that the coefficient of determination is 0.99. The results of the F test indicate statistical significance below 5%, so the model offers enough degrees of freedom (df) to vary the variables and statistically acceptable rating. Finally, the obtained results are significantly consistent with previous research and theoretical assumptions.