Domestic Investment and the Cost of Capital in the Caribbean / Shaun Roache.

Format:

Book

Government document

Author/Creator:

Roache, Shaun.

Series:

IMF Working Papers; Working Paper ; No. 2006/152

IMF Working Papers

Language:

English

Subjects (All):

Investments--Caribbean Area.

Investments.

Capital costs--Caribbean Area.

Capital costs.

Physical Description:

1 online resource (46 p.)

Edition:

1st ed.

Place of Publication:

Washington, D.C. : International Monetary Fund, 2006.

Language Note:

English

Summary:

Investment-to-GDP ratios across the Caribbean tend to be relatively high. In many countries, these ratios have been trending higher since the mid-1990s, largely reflecting public investment and foreign direct investment. Private domestic investors have been less prominent. This may be one reason why such high investment has delivered Caribbean growth rates below the middle-income average. This paper seeks to understand how higher private investment may be encouraged. Using new data, it concludes that: the multiplier effects of public investment and FDI on private domestic investment are weak; and private domestic investment (PDI) is sensitive to the cost of capital. Public policy designed to raise PDI should focus on creating conditions for a lower cost of capital. The focus should be on removing barriers to lower real interest rates, rather than the further extension of costly tax concessions.

Contents:

""Contents""; ""I. INTRODUCTION""; ""II. TRENDS IN REGIONAL INVESTMENT 6""; ""III. LITERATURE REVIEW""; ""IV. A BASIC INVESTMENT MODEL""; ""V. DATA""; ""VI. ESTIMATION ISSUES""; ""VII. ESTIMATION RESULTS""; ""VIII. CONCLUSIONS""; ""References""; ""Data Sources and Estimates ""

Notes:

"June 2006."

Includes bibliographical references.

Description based on print version record.

ISBN:

9786613821966

9781462368976

1462368972

9781452735009

145273500X

9781282541252

1282541250

9781452703398

1452703396

OCLC:

694141218