Click here for search results
Uncertainty, instability, and irreversible investment : theory, evidence, and lessons for Africa, Volume 1
 
Author:Serven, Luis; Collection Title:Policy, Research working papers ; no. WPS 1722
Country:Africa; Date Stored:2001/04/21
Document Date:1997/02/28Document Type:Policy Research Working Paper
SubTopics:Environmental Economics & Policies; International Terrorism & Counterterrorism; Economic Theory & Research; Trade and Regional Integration; Fiscal & Monetary Policy; Decentralization; ICT Policy and StrategiesLanguage:English
Major Sector:(Historic)Economic PolicyRegion:Africa
Report Number:WPS1722Sub Sectors:Other Economic Policy
Volume No:1  

Summary: A recent (but rapidly growing) literature has focused on how uncertainty and instability affect the adoption of fixed investment projects. That literature shows that if fixed investment projects are costly or impossible to reverse, uncertainty can become a powerful deterrent to investment. The author reviews the literature on irreversible investment to identify the implications for macroeconomic policy and to gauge the practical importance, especially for sub-Saharan Africa, of the link between uncertainty and investment. He presents empirical evidence on the negative association between investment performance and measures of instability, using cross-section time-series data. That evidence suggests that instability and uncertainty are important factors in Africa's poor investment record over the last two decades.

Official Documents
Official, scanned versions of documents (may include signatures, etc.)
File TypeDescriptionFile Size (mb)
PDF 52 pagesOfficial version*3.64 (approx.)
TextText version**
How To Order
Light-Weight Documents
Lighter (less MB) documents which may or may not be the final, official version
File TypeDescriptionFile Size (mb)
PDF 40 pagesWPS17220.14

* The official version is derived from scanning the final, paper copy of the document and is the official,
archived version including all signatures, charts, etc.
** The text version is the OCR text of the final scanned version and is not an accurate representation of the final text.
It is provided solely to benefit users with slow connectivity.



Permanent URL for this page: http://go.worldbank.org/JMFJ44D8N0