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The effect of inflation on growth investments: A note

Author

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  • Clovis de Faro

    (Fundação Getúlio Vargas)

Abstract

Motivated by the pioneering work of Brenner and Venetia (1983), henceforth designated as BV, a previous note that focused attention on the effect of taxation on the optimal duration of investments in a non inflationary environment (de Faro, 1996), the present note is aimed at investigating the effects of inflation on the optimal duration of investments. Specifically, considering the no reinvestment case only, our objective is to include in the analysis both a numerical illustration of the peculiar results of BV as well as indexation procedures that have been used in some high inflation economies.

Suggested Citation

  • Clovis de Faro, 1998. "The effect of inflation on growth investments: A note," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 13(1), pages 81-91.
    • Handle: RePEc:emx:esteco:v:13:y:1998:i:1:p:81-91
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    File URL: https://estudioseconomicos.colmex.mx/index.php/economicos/article/view/239/241
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    References listed on IDEAS

    as
    1. Albert Fishlow, 1974. "Indexing Brazilian Style: Inflation without Tears?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 5(1), pages 261-282.
    2. Brenner, Menachem & Venezia, Itzhak, 1983. "The Effects of Inflation and Taxes on Growth Investments and Replacement Policies," Journal of Finance, American Finance Association, vol. 38(5), pages 1519-1528, December.
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