Business Investment: Recent Performance And Some Implications For Policy
- Topics:
- Organization
- Tags:
- Business Investment,
- Finance,
- Investment,
- OECD,
- Performance
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Overview: The pattern of investment in most OECD countries in the 1980s was characterised by relatively weak levels of business net investment as a fraction of output. These developments were reflected in flagging capital-output ratios. At the same time, it would appear that more investment would be beneficial for a number of reasons - output and consumption possibilities would rise, and greater public and private investment could promote more rapid economic growth via embodiment or spillover effects. Taken at face value, these conclusions imply that government intervention that spurred higher investment could raise overall welfare. This paper examines the extent to which the fundamental time-series properties of investment, output and the cost of capital are consistent with the underlying theory.
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Format: PDF | Size: 835KB | Date: Jan 2005 | Pages: 53






