Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/105756
Authors: 
Ndikumana, Léonce
Year of Publication: 
2005
Series/Report no.: 
Working Paper, University of Massachusetts, Department of Economics 2005-14
Abstract: 
This study explores the determinants of investment using both aggregated industry-level data and disaggretated data on 27 sub-sectors of the manufacturing sector for the period 1970-2001. According to the results in this study, the government has potentially powerful means at its disposal to stimulate private investment. In particular, a domestic demand stimulus and public investment expansion will produce large gains in private investment. While the direct effects of lowering the interest rate appear to be quantitatively small, indirect effects operating notably through domestic demand and cheaper credit are likely to be large. The evidence in this study also indicates that it is important to minimize exchange rate instability to encourage investment. JEL Categories: E22; E52; E62
Subjects: 
South Africa
private investment
public investment
monetary policy
fiscal policy
Document Type: 
Working Paper

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