Volatility and Investment: Interpreting Evidence from Developing Countries

摘要: We uncover a significant negative correlation between various volatility measures and private investment in developing countries, even when adding the standard control variables. No such is uncovered measure sum of public spending. Indeed, spending positively correlated with some ineasures volatility. These findings suggest that detrimental impact on may be easier to detect using disaggregated data. provide several possible interpretations for our findings. Nonlinearities preferences or budget constraints can cause have first-order effects investment.