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The Cost of Volatile Investment in an Emerging Economy

Author

Listed:
  • Reinout De Bock

    (International Monetary Fund)

Abstract

I measure the welfare gains from eliminating fluctuations in investment in an emerging economy such as Argentina. The estimated welfare effects are an order of magnitude higher than those for the US and arise with moderate degrees of diminishing returns to investment.

Suggested Citation

  • Reinout De Bock, 2011. "The Cost of Volatile Investment in an Emerging Economy," Economics Bulletin, AccessEcon, vol. 31(2), pages 1696-1705.
    • Handle: RePEc:ebl:ecbull:eb-11-00297
    as

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    References listed on IDEAS

    as
    1. Neumeyer, Pablo A. & Perri, Fabrizio, 2005. "Business cycles in emerging economies: the role of interest rates," Journal of Monetary Economics, Elsevier, vol. 52(2), pages 345-380, March.
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    5. Reinout De Bock, 2012. "The Composition and Cyclical Behavior of Trade Flows in Emerging Economies," International Economics, CEPII research center, issue 132, pages 5-33.
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    7. Rudiger Dornbusch & Juan Carlos de Pablo, 1987. "Argentina: Debt and Macroeconomic Instability," NBER Working Papers 2378, National Bureau of Economic Research, Inc.
    8. Eberly, Janice C., 1997. "International evidence on investment and fundamentals," European Economic Review, Elsevier, vol. 41(6), pages 1055-1078, June.
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    More about this item

    Keywords

    Investment; Welfare costs; Emerging Economy; Growth; Argentina;
    All these keywords.

    JEL classification:

    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • D6 - Microeconomics - - Welfare Economics

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    Access and download statistics

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