Macroeconomic uncertainty and private investment in LDCs an empirical investigation by Luis Serven

Cover of: Macroeconomic uncertainty and private investment in LDCs | Luis Serven

Published by World Bank in Washington, DC .

Written in English

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  • Investments -- Developing countries -- Econometric models.,
  • Uncertainty -- Econometric models.

Edition Notes

Book details

StatementLuis Servén.
SeriesPolicy research working paper ;, 2035, Policy research working papers ;, 2035.
LC ClassificationsHG3881.5.W57 P63 no. 2035
The Physical Object
Pagination33 p. ;
Number of Pages33
ID Numbers
Open LibraryOL6885892M
LC Control Number00500474

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Macroeconomic uncertainty and private investment in LDCs. Washington, DC: World Bank, Development Research Group, Macroeconomic and Growth, [] (OCoLC) Macroeconomic Uncertainty and Private Investment in LDCs: An Empirical Investigation Luis Serv én The World Bank H St NW Washington DC e-mail: [email protected] Abstract The impact of uncertainty on investment has attracted considerable attention in the analytical and empirical macroeconomic literature.

the effects of macroeconomic uncertainty on irreversible investment Download the effects of macroeconomic uncertainty on irreversible investment or read online books in PDF, EPUB, Tuebl, and Mobi Format. Click Download or Read Online button to get the effects of macroeconomic uncertainty on irreversible investment book now.

This site is like a. 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, Macroeconomic uncertainty and private investment in LDCs book real exchange rate, and the price of capital goods), and examines their.

Book 1 online resource Subjects: Investments -- Developing countries -- Econometric models. Uncertainty -- Econometric models. System Details: Mode of access: World Wide Web.

Notes: Description based on print version record. Contributor: World Bank. Other format: Print version: Serven, Luis. Macroeconomic uncertainty and private investment in LDCs. Macroeconomic uncertainty and aggregate private investment in South Africa Article in South African Journal of Economics 74(2) June with 44 Reads How we measure 'reads'.

Servén () examines the empirical link between RER uncertainty and private investment in least developed countries (LDCs). The study finds that RER uncertainty has a significant negative Author: Luis Serven. The purpose of this paper is to present evidence of a link between macroeconomic uncertainty and private investment in developing countries over the period.

` We construct measures of macroeconomic uncertainty and add them to previous investment regressions incorporating endogenous growth elements such as human capital.

by: LDCs, investment as a fraction of GDP has fallen during the s, despite moderate growth. Yet the success of macroeconomic policy in these countries requires increases in private investment. This has cre- ated a sort of Catch that makes the social value of investment higher than its private value.

An Investigation of Macroeconomic Determinants of Domestic Private Investment Evidence from East Africa A Research Paper presented by: LDCs LICs Least Developed Countries Low Income Countries Domestic Private Investment, domestic credit to the private sector, East Africa, Economic growth and development, FDI, Financial.

“ Macroeconomic Uncertainty and Private Investment in LDCs: An Empirical Investigation.” World Bank, Washington, DC. World Bank Policy Research Working Paper No. Having established that our identification of global and national uncertainty appears to make sense from an economic perspective, this section follows common practice in much of the macroeconomic uncertainty literature by performing Granger-causality tests to establish whether and how uncertainty affects national macroeconomic performance.

10 Employing Granger-causality tests of global Cited by: 8. Private Investment and Macroeconomic Ad justment An Overview Luis Serven and Andres Solimano This paper reviews current investment theories, recent models linking macroeconomic policies and private investment, and the effect of uncertainty and credibility on irreversible investment decisions.

Empirical studies on the subject are also reviewed. Macroeconomic turbulence and volatility in financial markets can fatally affect firm's performance.

Very few firms make serious attempts to inform market participants and other outsider stakeholders about the impact of macroeconomic fluctuations--manifested as changes in exchange rates, interest rates, inflation rates and stock market returns-- on performance.

Macroeconomic Uncertainty and Investment – Empirical Analysis for Romania Romanian Journal of Economic Forecasting – 2/ The standard procedure of estimation requires defining some instrumental variables to correct the problem of endogeneity of the columns of X and, also, to correct the correlation between dependent variable and.

Downloadable (with restrictions). Abstract Macroeconomic uncertainty is a major challenge facing policymakers. Exchange rate is usually associated with high level of volatility in developing economies. This has potential effect on other economic variables such as investment.

This paper empirically examines the impact of exchange rate uncertainty on private investment in the BRICS by: 2. Policy Uncertainty and Private Investment in Developing Countries Dani Rodrik. NBER Working Paper No. Issued in June NBER Program(s):International Trade and Investment, International Finance and Macroeconomics A resurgence in private investment is a necessary ingredient of a sustainable recovery in heavily-indebted developing countries.

Evidence shows that positive macroeconomic uncertainty shocks adversely affect economic growth and consumption. In addition, macroeconomic uncertainty magnified the recessionary effects of the global financial crisis on economic growth during the recession in Author: Eliphas Ndou, Nombulelo Gumata, Mthuli Ncube, Mthuli Ncube.

Global Macroeconomic Uncertainty Tino Berger Sibylle Herzy February 6, Abstract We measure global real and nominal macroeconomic uncertainty and analyze its impact on individual countries’ macroeconomic performance.

Global uncertainty is measured through the conditional variances of global factors in in ation and output. Measuring Uncertainty † By Kyle Jurado, Sydney C.

Ludvigson, and Serena Ng* This paper exploits a data rich environment to provide direct econo-metric estimates of time-varying macroeconomic uncertainty. Our estimates display significant independent variations from popular uncertainty proxies, suggesting that much of the variation in theFile Size: 1MB.

government investment in a sample of 17 OECD economies since and model simulations, the paper finds that increased public investment raises output, both in the short term and in the long term, crowds in private investment, and reduces unemployment. Several factors shape the macroeconomic effects of public Size: KB.

Downloadable. The initial theories of investment have emphasized the role of reduction of interest rate and increase in output for encouraging private investment. But there are ample grounds for doubting these theories. As a result, researchers have recently emphasized the importance of uncertainty in determining the private rate of investment.

The Price of Macroeconomic Uncertainty with Tenuous Beliefs Lars Peter Hanseny Thomas tz December 9, Abstract A dynamic extension of max-min preferences allows a decision maker to consider both a parametric family of what we call structured models and unstructured alterna-tives that are statistically close to them.

The Macroeconomic Impact of Financial and Uncertainty Shocks Caldara, Dario, Cristina Fuentes-Albero, Simon Gilchrist and Egon Zakrajsek International Finance Discussion Papers Board of Governors of the Federal Reserve System Number May Please cite paper as: Caldara, Dario, Cristina Fuentes-Albero, Simon Gilchrist and.

viii World Economic Situation and Prospects Investment conditions have improved, but elevated policy uncertainty and rising levels of debt may prevent a more.

While uncertainty is not directly observable, this article constructs an aggregate measure of the economic uncertainty faced by households and companies, based on a number of proxy indicators.

It also provides some quantitative analysis of the impact of uncertainty on economic activity, drawing a distinction between shocks to uncertainty that Cited by: slowdown of both global and national measures of uncertainty.

The Great Recession is re ected in a dramatic increase in both nominal and real global uncertainty, while not a ecting national uncertainties. Global macroeconomic uncertainty e ects in ation and/or output growth in all countries except Germany.

Global Macroeconomic Uncertainty21 / 1. macroeconomic uncertainty and cross–sectional distribution of cash–to–asset ratios for US non–financial firms.

One may conclude that macroeconomic uncertainty is an important factor of macroeconomic environment. Following this idea, we want to contribute to the literature on corporate debt by investigation of the link between. “Real Exchange Rate Uncertainty and Private Investment in LDCs”, Review of Economics and Statist ().

“Pricing currency risk under currency boards” (with Sergio Schmukler), Journal of Development Econom (). The resulting investment strategy of the firm is to invest in a project only if the present value of expected cash flow exceeds the total cost including the value of waiting, i.e.

the option theory to real investment invalidates the traditional net present value rule of : Hjalmar Böhm, Michael Funke, Nikolaus A. Siegfried. An Eclectic Model of Recent LDC Macroeconomic Policy Analyses RICHARD C. PORTER and SUSAN I. RANNEY University of Michigan, Ann Arbor Summary.

- After decades of neglect, there has been a growing concern in the s with the theoretical and econometric analysis of short-run macroeconomic policy in LDCs.

the financial crisis of The uncertainty index is a leading indicator of a recession. An unanticipated increase in the index is associated with a fall in GDP, investment, industrial production and private sector employment.

Contrary to evidence for the U.S.A and U.K., uncertainty shocks are Size: 1MB. India Macroeconomics Annuallike the annuals for the earlier two years, provides a macroeconomic update on the state of the country's economy and discusses issues that were pertinent during the course of the year.

It analyzes macroeconomic events using macroeconomic and statistical tools. investment. Domestic investment, therefore, comprises private and public investment.

Private investment, which can as well be categorized into domestic private investment and foreign direct investment, is investment in physical capitals. It deals with investment by firms. According to Soludo (), private investment is classified. Macroeconomic uncertainty should play an important role in firms’ ability to access the capital market.

We develop this intuition in the next section. The effects of macroeconomic uncertainty on leverage Macroeconomic uncertainty affects both the level of firms’ capital investment and how it is financed.

Macroeconomic uncertainties, prudent debt targets and fiscal rules The sharp rise in debt experienced by most OECD countries raises questions about the prudent debt level countries should target.

It also raises questions about the fiscal frameworks needed to reach them and to accommodate cyclical fluctuations along the path towards a prudent Cited by: 8. uncertainty about economic policy put forward by Baker et al. () is closely related to business cycle uncertainty but not to oil and commodity price uncertainty.

Impulse response analysis reveals that both types of macroeconomic uncertainty foreshadow a drop in real activity, i.e. both types of macroeconomic uncertainty are by:   This paper provides new evidence of the macroeconomic effects of public investment in advanced economies.

Using public investment forecast errors to identify the causal effect of government investment in a sample of 17 OECD economies since and model simulations, the paper finds that increased public investment raises output, both in the short term and in the long term, crowds in Cited by: 3 ECB Working Paper Series No February Abstract 4 Non-technical summary 5 1 Introduction 7 2 Literature and stylised facts 8 Related literature 8 Some stylised facts 10 3 Methodology 11 VAR specifi cation 11 Macroeconomic rates of return 14 4 Empirical analysis 17 Data 17 VAR estimation 18 The rates of return 20 Crowding-in and crowding-out effects These finds imply that, to promote private investment in the WAEMU zone, there is a need among others for more proper design and implementation of aggregate demand management policies, and political framework stability.

Key words: Private investment, WAEMU, Dynamic fixed-effects estimator. JEL: Author: Adama Messanh Combey. uncertainty over time and investigate their importance for macroeconomic ⁄uctuations.

We also study the behavior and evolution of the various components of our decomposition in a model that features ambiguity and risk.

Keywords: Uncertainty, Risk, Ambiguity, Knightian Uncertainty, Survey of Professional Forecasters, Predictive Densities.The existing literature about the uncertainty-investment relationship has shown that uncertainty negatively affects investment decisions, i.e., when facing high uncertainty, firms prefer to “wait and see.” The aim of this paper is to investigate how the lumpiness of investment activity under uncertainty affects the .Macroeconomic determinants of private investment in Ethiopia using time series data for the period The result from this study indicated that GDP, public investment on.

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