Abstract

Most countries consider investment to be an imperative and necessity for economic growth, a sensitive component and an effective tool to promote the economy because of the increase in production capacity and exploitation of human resources, but the management and direction of investment is the key and the necessary destination to serve the economic development This study aims to test the causal relationship between the growth of the growth of intermediation investments and economic growth in the long and short term, based on the "Caldor" hypothesis. The study covered annual data for the period (2017-1981). And the nature of the equilibrium relationship in the long and short term. The results reached a one-way causal relationship, which tends from economic growth to longterm investment growth. The possible explanation was due to the financial crisis which spread to all sectors Political and social instability in Arab countries and the outbreak of Arab revolutions. Nevertheless, the GDP in the Arab countries was increasing from the beginning of the study period to the end of this study. This indicates that there were other variables that affected GDP, such as foreign and domestic investments ,As well as the contribution of its constituent economic sectors.