Series: Working Papers. 9407.
Author: Ángel Estrada and Ignacio Hernando.
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Abstract
This paper offers an estimation of an investment function whose specification enables the impact of different measures of fiscal policy, incomes policy or disminishing inflation in different sectors to be quantified.
The main conclusions are:
a) the main determinant of investment is the user cost, whereby any investment-boosting policy should be conducted via the reduction of said user cost;
b) the effectiveness of incomes policies should not be overstated, and;
e) the inflationary behaviour of sorne sectors that produce nJterrnediary input s is hampering the investment process.