Macroeconomic Uncertainty and Aggregate Private Investment in South Africa

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. Copyright (c) 2006 The Author. Journal compilation (c) 2006 Economic Society of South Africa.

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Reel Konut Fi̇yatlari İle Ekonomi̇ Poli̇ti̇kalari Beli̇rsi̇zli̇ği̇ Arasindaki̇ İli̇şki̇: Güney Kore Örneği̇

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