DYNAMIC ANALYSIS OF THE RELATIONSHIP BETWEEN INVESTMENTS AND HUMAN CAPITAL: THE CASE OF UZBEKISTAN
Keywords:
human capital, investment, Engle-Granger Cointegration test, economic relationship, bidirectional, short-term impact, long-term equilibrium, sustainable growth.Abstract
This research examines the relationship between human capital and investment in Uzbekistan from 2010 to 2021 using the Engle-Granger Cointegration test. The study reveals a strong bidirectional connection between human capital and investment, where each positively impacts the other. Additionally, the analysis identifies a mechanism that ensures the system returns to long-term equilibrium following disturbances, with investment adjusting more rapidly than human capital. These findings offer valuable insights for Uzbekistan's policymakers and economists, emphasizing the need for coordinated efforts to foster economic growth by investing in education and health sectors to improve human capital and attract domestic and foreign investments. While short-term shocks may occur, the economy's ability to revert to equilibrium over time provides some level of reassurance during policy implementation.
