Short and Long Run Determinants of Private Investment in Argentina
University of Illinois at Urbana-Champaign - Department of Economics
Universidad Argentina de la Empresa (UADE)
Journal of Applied Economics. Vol. 8, No. 2, pp. 389-406, November 2005
This study provides an empirical analysis of the macroeconomic factors that can potentially affect investment decisions in Argentina in a short, medium and long run perspective. Both the theory and the empirical literature are reviewed in order to identify a private investment function for the last three decades (1970-2000). The results suggest that investment decisions seem to be determined, in the short run, by shocks in returns (exchange rate, trade liberalization) and in aggregate demand. Besides, there is evidence of a "crowding-out" effect of public investment. In the long run, the capital accumulation path seems to be closely dependent on both well-developed financial and credit markets and on perspectives of fiscal sustainability.
Keywords: investment, macroeconomic instability, crowding-out, Argentina
JEL Classification: E22, H54, O16, O23Accepted Paper Series
Date posted: February 28, 2006
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo6 in 0.500 seconds