The Effect of Uncertainty and Volatility on Financial Markets: The Effect on Growth and Development - Softcover

Farias, Maria Elisa

 
9783330010567: The Effect of Uncertainty and Volatility on Financial Markets: The Effect on Growth and Development
Softcover
ISBN 10: 3330010568 ISBN 13: 9783330010567
Verlag: LAP LAMBERT Academic Publishing, 2016

Inhaltsangabe

We analyze the role of uncertainty on financial markets, growth, and development, considering that uncertainty is caused by two shocks, a liquidity shock and an idiosyncratic productivity shock. The liquidity shock creates a demand for credits, the idiosyncratic shock (productivity of the risky investment) determines financial development. When agents foresee their idiosyncratic shocks, they can share risk and aggregate uncertainty can enhance growth. However, imperfect foresight impedes risk sharing and constraints credits. In this case, uncertainty reduces growth in the long term. The government can promote inter-temporal saving and international capital flows to compensate for distortions. Performing a numerical analysis for developing countries, and utilizing the U.S. as a benchmark, we find a positive relationship between credits and the return of the risky investment (R&D). We also find that the return of this investment can be more important for growth than its ratio to GDP. The foregoing is crucial for developing countries that need to growth faster for development.

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Über die Autorin bzw. den Autor

Maria Elisa Farias, Economist, Ph.D. at Universidad de Chile, M.A. at New York University. Macroeconomics, Monetary Economics, Development, International Economics. Professor, Universidad Diego Portales, Universidad Federico Santa Maria, Chile. Previously, Senior Economist and Analyst, Banco Central, Ministerio de Relaciones Exteriores, Chile.

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Verlag
LAP LAMBERT Academic Publishing
Erscheinungsdatum
2016
Sprache
Englisch
ISBN 10 
3330010568
ISBN 13 
9783330010567
Einband
Taschenbuch
Anzahl der Seiten
68
Kontakt zum Hersteller
Nicht verfügbar
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Riga
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