What does this research mean for the field?

Capital investment has a positive long-term effect on economic growth, but this growth-enhancing effect is significantly diminished by inflation. Novelty: ClaimNovelty.INCREMENTAL. Consensus alignment: ConsensusAlignment.NEUTRAL.

What question did this study set out to answer?

Assess the impact of capital investment on economic growth and determine how inflation moderates this relationship.

September 4, 2026Open Access

The Impact of Capital Investment on Economic Growth under Inflationary Conditions

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Assess the impact of capital investment on economic growth and determine how inflation moderates this relationship.
Analyzed annual macroeconomic time-series data from Vietnam spanning 1996 to 2023.
Employed an Autoregressive Distributed Lag (ARDL) model with an interaction term between investment and inflation to evaluate short- and long-run dynamics.
Capital investment exerted a positive and statistically significant long-run effect on economic growth, whereas inflation alone showed no significant direct effect.
The interaction term between investment and inflation was negative and statistically significant, showing that inflation diminishes the growth benefits of investment.
A negative and statistically significant error correction term confirmed rapid convergence toward long-run equilibrium following short-run shocks.

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Implication

Time-series analysis reveals that inflation dampens the growth benefits of capital investment in Vietnam, highlighting the critical need for macroeconomic price stability.

Cite This Study

Nguyen The Khang (2026) studied this question.

synapsesocial.com/papers/6a9a85fa5d9e33f25c6316a2 https://doi.org/10.5281/zenodo.22254206

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Implication

Time-series analysis reveals that inflation dampens the growth benefits of capital investment in Vietnam, highlighting the critical need for macroeconomic price stability.

The Impact of Capital Investment on Economic Growth under Inflationary Conditions

Key Points

Discussion

Implication

Cite This Study

The Impact of Capital Investment on Economic Growth under Inflationary Conditions

Key Points

Discussion

Implication

Cite This Study

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