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- Title
MACROECONOMIC UNCERTAINTY AND AGGREGATE PRIVATE INVESTMENT IN SOUTH AFRICA.
- Authors
Kumo, Wolassa L.
- Abstract
This paper investigates the effects of time varying uncertainty on aggregate private fixed investment in South Africa. The GARCH generated measures of volatility of selected macroeconomic variables indicating five measures of uncertainty are used in the analysis. These are output growth uncertainty, uncertainty about changes in the real effective exchange rate, uncertainty about changes in the real interest rate, producer inflation uncertainty, and terms of trade uncertainty. The results of the estimation by an empirical ECM model of conventional investment determinants controlling for the effects of uncertainty indicated that, over all, time varying macroeconomic uncertainty significantly reduces private fixed investment.
- Subjects
SOUTH Africa; INVESTMENTS; COMMERCIAL policy; TERMS of trade; FREE trade; MONETARY policy
- Publication
South African Journal of Economics, 2006, Vol 74, Issue 2, p190
- ISSN
0038-2280
- Publication type
Article
- DOI
10.1111/j.1813-6982.2006.00071.x