Abstract
Exchange Rate Uncertainty And Private Investment In BRICS Economies
by
Martin Ruzima
In many developing countries, high degree of macroeconomic uncertainty is a major challenge facing policymakers. Exchange rate is usually associated with high level of volatility in developing economies. This has potential effect on other economic variables such as investment. In this paper, we empirically examine the impact of exchange-rate uncertainty on private investment in BRICS countries. We gleaned cross-country time series data from World Development Indicators and Global Development Network Growth Database, and covers the period 1997 to 2012. We build ARCH-based measure of exchange-rate volatility and finds that it has a strong negative effect on private investment in both fixed effects and GMM estimations. Policy should focus on stabilizing domestic currencies in BRICS countries.
Committee
Workshop
Key Dates
Communication
First Conference Link