Effect of Public Investment on Private Investment

Abstract
Investment is an important component accessory to production in the economy of every country. Hence, investment is one of the fundamental necessity for improving economically in every country. Because in developing country governmental investment is generally numerate as political implement, there is a belief between diplomats and economists of these countries that governmental investment is  an effective stimulant for the investment of private sector and as a result it is a powerful implement for growth political and economic consistence, but it should be considered that governmental investment reduces from private sector’s resources for investment, moreover ,it also leads to decreasing of private sector’s investment in case that it is used for production of goods that compete with private sector’s production. In the other word crowding in happens. This article has been done in order to survey the relation between governmental investment and private investment and the VECM method in econometrics has been used.