Real Exchange Rate Uncertainty And Private Investment In Developing Countries PDF Download
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Author | : Luis Servén |
Publisher | : World Bank Publications |
Total Pages | : 24 |
Release | : 2002 |
Genre | : Capital stock |
ISBN | : |
Download Real Exchange Rate Uncertainty and Private Investment in Developing Countries Book in PDF, ePub and Kindle
Serven examines empirically the link between real exchange rate uncertainty and private investment in developing countries using a large cross country-time series data set. He builds a GARCH-based measure of real exchange rate volatility and finds that it has a strong negative impact on investment, after controlling for other standard investment determinants and taking into account their potential endogeneity. The impact of uncertainty is not uniform, however. There is some evidence of threshold effects, so that uncertainty only matters when it exceeds some critical level. In addition, the negative impact of real exchange rate uncertainty on investment is significantly larger in economies that are highly open and in those with less developed financial systems.
Author | : Luis Servén |
Publisher | : |
Total Pages | : 21 |
Release | : 2016 |
Genre | : |
ISBN | : |
Download Real Exchange Rate Uncertainty and Private Investment in Developing Countries Book in PDF, ePub and Kindle
Serven examines empirically the link between real exchange rate uncertainty and private investment in developing countries using a large cross country-time series data set. He builds a GARCH-based measure of real exchange rate volatility and finds that it has a strong negative impact on investment, after controlling for other standard investment determinants and taking into account their potential endogeneity. The impact of uncertainty is not uniform, however. There is some evidence of threshold effects, so that uncertainty only matters when it exceeds some critical level. In addition, the negative impact of real exchange rate uncertainty on investment is significantly larger in economies that are highly open and in those with less developed financial systems.This paper - a product of the Office of the Chief Economist, Latin America and the Caribbean Region - is part of a larger effort in the region to assess the effects of macroeconomic volatility.
Author | : Luis S??rven |
Publisher | : |
Total Pages | : |
Release | : 2013 |
Genre | : |
ISBN | : |
Download Real Exchange Rate Uncertainty and Private Investment in Developing Countries Book in PDF, ePub and Kindle
The author examines empirically the link between real exchange rate uncertainty and private investment in developing countries using a large cross country-time series data set. He builds a GARCH-based measure of real exchange rate volatility and finds that it has a strong negative impact on investment, after controlling for other standard investment determinants and taking into account their potential endogeneity. The impact of uncertainty is not uniform, however. There is some evidence of threshold effects, so that uncertainty only matters when it exceeds some critical level. In addition, the negative impact of real exchange rate uncertainty on investment is significantly larger in economies that are highly open and in those with less developed financial systems.
Author | : A. Chhibber |
Publisher | : Elsevier |
Total Pages | : 256 |
Release | : 2013-10-22 |
Genre | : Business & Economics |
ISBN | : 1483291340 |
Download Reviving Private Investment in Developing Countries Book in PDF, ePub and Kindle
The aim of the research described in this volume is to examine the behavior of private domestic investment in a sample of seven developing economies: Chile, Colombia, Egypt, Indonesia, Morocco, Turkey, and Zimbabwe. The studies represent a first step toward understanding the investment process in developing countries and the scope for government policy to affect private capital formation. Such issues will become increasingly important in the future as more developing countries try to encourage private investment. Four key issues emerge in the analysis of the determinants of private investment and its role in adjustment programs in developing countries. The first is the impact of changes in the exchange rate; the second major concern is the existence of crowding out of private activity as a result of government borrowing in domestic financial markets through interest rates or quantity rationing. A third and related issue is whether government spending, particularly that on investment, "crowds in" or "crowds out" private capital formation. Fourth, the effects of uncertainty are important in determining the response of private agents to changes in the incentive structure.
Author | : Dani Rodrik |
Publisher | : |
Total Pages | : 38 |
Release | : 1989 |
Genre | : Developing countries |
ISBN | : |
Download Policy Uncertainty and Private Investment in Developing Countries Book in PDF, ePub and Kindle
A resurgence in private investment is a necessary ingredient of a sustainable recovery in heavily-indebted developing countries. Policy reforms in these countries involve a serious dilemma, especially when they include structural and microeconomic features. On the one hand, entrepreneurs, workers, and farmers must respond to the signals generated by the reform for the new policies to be successful. On the other hand, rational behavior by the private sector calls for withholding investment until much of the residual uncertainty regarding the eventual success of the reform is eliminated. This paper shows that even moderate amounts of policy uncertainty can act as a hefty tax on investment, and that otherwise sensible reforms may prove damaging if they induce doubts as to their permanence. A simple model is developed to link policy uncertainty to the private investment response.
Author | : |
Publisher | : World Bank Publications |
Total Pages | : 49 |
Release | : |
Genre | : |
ISBN | : |
Download Adjustment, Investment, and the Real Exchange Rate in Developing Countries Book in PDF, ePub and Kindle
LDC adjustment packages Riccardo Faini and Jaime de Melo Developing countries have been hit by a fall in their terms of trade, high real interest rates on their external debt, and a drought in commercial lending from abroad. Their subsequent adjustment packages, often supported by loans from the IMF and World Bank, focused on a sharp real exchange rate depreciation to restore external balance and a host of microeconomic reforms to secure a simultaneous supply-side improvement. This paper examines the success of these ‘adjustment with growth' packages in a large sample of developing countries. We find these packages have been much more successful in LDCs which export manufactures than they have in those concentrating on primary exports (primarily low-income African countries); the latter have not resumed sustainable growth, and most of their external adjustment has arisen from expenditure reduction, not an increase in supply. The longer-term prospects for manufacturing exporters are also brighter: there we detect signs of increased efficiency and a smaller decline in investment than in primary exporters. But we also find that a high external debt burden and an unstable macroeconomic environment impede investment in all LDCs. In the longer term, adjustment with growth packages will succeed only if they are accompanied by a more stable macroeconomic environment and appropriate debt relief
Author | : Luis Servén |
Publisher | : |
Total Pages | : 34 |
Release | : 2016 |
Genre | : |
ISBN | : |
Download Macroeconomic Uncertainty and Private Investment in Developing Countries Book in PDF, ePub and Kindle
Economic uncertainty can affect investment through different channels, some of which operate in mutually opposing directions, so the sign of its overall effect is ambiguous and can be assessed only empirically. This paper presents a thorough empirical assessment of the investment-uncertainty link in developing countries. The impact of uncertainty on investment has attracted considerable attention in the analytical and empirical macroeconomic literature. In theory, however, uncertainty can affect investment through different channels, some of which operate in mutually opposing directions. So the sign of its overall effect is ambiguous and can be assessed only empirically. To thoroughly assess the impact of macroeconomic uncertainty on private investment, Serven uses a large panel data set on developing countries. He draws a distinction between sample variability and uncertainty, constructs alternative measures of the volatility of innovations to five key macroeconomic variables (inflation, growth, the terms of trade, the real exchange rate, and the price of capital goods), and examines their association with aggregate private investment. He then adds these constructed measures to an empirical investment equation that is estimated using alternative panel data econometric methods, allowing for simultaneity, country-specific effects, and parameter heterogeneity across countries. The results underscore the robustness of the link between investment and uncertainty. Virtually all of the volatility measures in the paper show a strong negative association with investment ratios. In addition, the regression estimates indicate that uncertainty has an adverse direct impact on investment, over and above any indirect effects that might also be at work. This finding is particularly robust in the case of real exchange rate volatility, which invariably has a robust negative effect on investment, regardless of econometric specification. This paper - a product of Macroeconomics and Growth, Development Research Group - is part of a larger effort in the group to understand the determinants of private investment decisions. The author may be contacted at [email protected].
Author | : Luis Serven |
Publisher | : |
Total Pages | : 40 |
Release | : 1998 |
Genre | : Inversion privada |
ISBN | : |
Download Macroeconomic Uncertainty and Private Investment in LDCs Book in PDF, ePub and Kindle
Author | : Yaw Owusu Asante |
Publisher | : |
Total Pages | : 64 |
Release | : 2000 |
Genre | : Economic surveys |
ISBN | : |
Download Determinants of Private Investment Behaviour Book in PDF, ePub and Kindle
Author | : William C. Gruben |
Publisher | : Springer Science & Business Media |
Total Pages | : 274 |
Release | : 1997-08-31 |
Genre | : Business & Economics |
ISBN | : 9780792399087 |
Download Exchange Rates, Capital Flows, and Monetary Policy in a Changing World Economy Book in PDF, ePub and Kindle
The dramatic growth of international capital flow has provided unprecedented opportunities and risks in emerging markets. This book is the result of a conference exploring this phenomenon, sponsored by the Federal Reserve Bank of Dallas. The issues explored include direct versus portfolio investment; exchange rates and economic growth; and optimal exchange rate policy for stabilizing inflation in developing countries. It concludes with a panel discussion on central bank coordination in the midst of exchange rate instability.