The apparent slowdown in U.S. investment and productivity growth in recent years has led to a number of proposals to stimulate investment through the adoption of tax incentives. This paper describes the incentives that were contained in the February 1993 Budget and estimates their effect on the...

This paper examines the extent of international financial integration, and its consequences for the current account. The evidence indicates that financial liberalization in the 1970s and 1980s has resulted in a substantial movement towards closer integration of world capital markets. By reducing...

The paper presents a model of irreversible investment under uncertainty, where investment takes place whenever a threshold level of marginal returns is reached. The threshold depends positively on price volatility; a change from high to low inflation induces an upward capital stock adjustment....

The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and...

In the 1980s, U.S. real investment in high technology equipment has grown rapidly while other components of business fixed investment have been weak. The surge in real high technology investment has been accompanied by a very sharp decline in its relative price, leading to difficult index number...

There is increasing emphasis on the importance of efficient financial markets for sustained real investment and economic growth, yet limited empirical research on the effects of the deregulation of financial markets on the firm''s investment decisions. The purpose of this paper is to model the...

The substantial increase in foreign direct investment (FDI) in recent years has triggered a discussion of a uniform treatment of investment in international law. Most contributions to the multilateral investment framework derive from the World Trade Organization (WTO) agreements on trade...

In a sample of 60 developing countries, we find evidence of a strong-almost one-to-one-relationship between capital inflows and domestic investment. However, this relationship has evolved over time. While growing financial integration with the rest of the world has increased access to foreign...

This paper examines whether capital outflows may have contributed to output declines during the Asian Crisis by reducing the financing available for domestic investment. Panel data regressions suggest a positive, short-term relationship between net capital inflows and investment during the...

This study presents a theory of financial infrastructure - or the set of rules, institutions, and systems within which agents carry out financial transactions. It investigates the effects of financial infrastructure development on financial architecture and real capital accumulation, taking into...