Dynamics of investment and growth in developing countries during the 1980s
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Raimundo Soto [1]
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[1] Georgetown University
Georgetown University
Estados Unidos
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- Localización: Revista de análisis económico, ISSN-e 0718-8870, ISSN 0716-5927, Vol. 6, Nº 2, 1991, págs. 141-170
- Idioma: inglés
- Enlaces
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Resumen
Since the outbreak of the debt crisis in 1982 growth and investment in developing countries have been persistently low by historical standards. Most of the adjustment processes undertaken during the 1980s included strong devaluations and fiscal adjusrment relying heavily on lower public investment.The asessment of the consistency of these policies with expected increases in private investment and growth has been based up to now mainly on static crosscountry models that show contradictory results, specially with regard to the role of foreign debt, the real exchange rate, and public investment.This paper discuss why static approaches are inapproonate for an essentialy dynamic problem and proposes the estimation if a VAR-data model which may help clarify the relations between private investment and growth. The simulations of growth and investment responses to changes in the real exchange rate and the level of public investment show that dynamic responses through lagged effects differ substantially from what available static models suggest.
