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Author/Editor:
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Rahul Anand ; Volodymyr Tulin
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Publication Date:
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March 24, 2014
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Electronic Access:
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Free Full text
(PDF file size is 508KB).
Use the free
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.
The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
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Summary:
This paper documents the recent slowdown in investment in India and explores its underlying causes. The sharp investment deceleration has sparked an intense debate about the role of interest rates, as well as business confidence and economic policy uncertainty. Our results suggest that while explaining aggregate investment activity better than nominal interest rates, real interest rates account for only one quarter of the explained investment downturn. In addition, standard macro-financial variables do not fully explain the recent investment slump. Using a new measure of economic policy uncertainty, the results suggest that heightened uncertainty and deteriorating business confidence have played a key role in the recent investment slowdown.
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Order a print copy
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Series:
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Working Paper No. 14/47
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Subject(s):
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Investment | India | Interest rates | Economic policy | Economic models
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English
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Publication Date:
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March 24, 2014
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ISBN/ISSN:
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9781475531183/1018-5941
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Format:
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Paper
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Stock No:
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WPIEA2014047
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Pages:
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18
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Price:
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US$18.00 )
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Please address any questions about this title to
publications@imf.org
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