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This paper adopts a flexible framework to assess both short- and long-run business cycle linkages between six Latin American (LA) countries and the four largest economies in the world (namely the US, the Euro area, Japan and China) over the period 1980:I-2011:IV. The result indicate that within...
Persistent link: https://www.econbiz.de/10010595388
When investment is irreversible, theory suggests that firms will be “reluctant to invest.” This reluctance creates a … wedge between the discount rate guiding investment decisions and the standard Jorgensonian user cost (adjusted for risk). We …
Persistent link: https://www.econbiz.de/10005766040
Is real investment fully determined by fundamentals or is it sometimes affected by stock market misvaluation? We … introduce three new tests that: measure the reaction of investment to sales shocks for firms that may be overvalued; use Fama … misvaluation into standard investment equations to estimate the quantitative effect of misvaluation on investment. Overall, the …
Persistent link: https://www.econbiz.de/10005766115
Investment in network infrastructure can boost long-term economic growth in OECD countries. Moreover, infrastructure … investment can have a positive effect on growth that goes beyond the effect of the capital stock because of economies of scale … between infrastructure and economic growth. Time-series results reveal a positive impact of infrastructure investment on …
Persistent link: https://www.econbiz.de/10005013038
firms in making their investment decisions.We use a revealed preference approach that relies on the pattern of investment … spending – combined with investment theory – to estimate the discount rates used by managers. The standard story predicts that … firms with high stock prices and good investment opportunities should have discount rates that do not differ systematically …
Persistent link: https://www.econbiz.de/10009150640
model features irreversible investment, no capital markets and fixed and sunk costs to export. Several features of the … distribution of investment rates and export participation patterns observed in firm-level data are closely matched in a calibration …
Persistent link: https://www.econbiz.de/10008833898
away from production, tends to reduce investment and could therefore reduce economic growth. We first review the … trade – and economic growth that is due to productive investment. Growth due to external factors tends to be positively … related to conflict, whereas growth due to productive investment should be negatively related to conflict. Finally, we discuss …
Persistent link: https://www.econbiz.de/10005405932
We evaluate the proposal for official dollarization in Costa Rica by applying a new approach to measure the business cycle comovements with the United States. While the literature often focuses on the correlation of shocks, we point out that the response of each country to the shocks is also an...
Persistent link: https://www.econbiz.de/10008583698
In recent decades economists have turned their attention to data that asks people how happy or satisfied they are with their lives. Much of the early research concluded that the role of income in determining well-being was limited, and that only income relative to others was related to...
Persistent link: https://www.econbiz.de/10010877842
Dean Baker and Adriane Fugh-Berman have published a critique of a study I performed in 2007, entitled “Why has longevity increased more in some states than in others?” One of the conclusions I drew from that study was that medical innovation accounts for a substantial portion of recent...
Persistent link: https://www.econbiz.de/10005013069