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Business and Economics > Investments: Stocks

You are looking at 1 - 10 of 14 items for :

  • Type: Journal Issue x
  • Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity x
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Cover IMF Working Papers
A Proposal to Improve Country-Level Data on Total Factor Productivity Growth
Andrew M. Warner
The assumption behind popular data on national capital stocks, and therefore total factor productivity, is that countries were in a steady state in the first year that investment data became available. This paper argues that this assumption is highly implausible and is necessarily responsible for implausible data on the ratio of capital to output and productivity growth. It is not credible that countries with similar incomes had huge differences in their capital stocks. This paper claims, with evidence, that implausible features of the data can be greatly reduced by using data on electricity usage or national stocks of road vehicles.
Keywords:
Productivity; Total Factor Productivity; Economic Growth; capital output ratio; total factor productivity growth; capita-output ratio; investment data; TFP growth estimate; Capital productivity; Stocks; Capital adequacy requirements; Electricity; Africa; Global
Cover IMF Working Papers
What Happens if Central Banks Misdiagnose a Slowdown in Potential Output
Mr. Bas B. Bakker
In the last few decades, real GDP growth and investment in advanced countries have declined in tandem. This slowdown was not the result of weak demand (there has been no shift along the Okun curve), but of a decline in potential output growth (which has shifted the Okun curve to the left). We analyze what happens if central banks mistakenly diagnose the problem as insufficient demand, when it is actually a supply problem. We do this in a real model, in which inflation is not an issue. We show that aggressive central bank action may revive gross investment, but it will not revive net investment or growth. Moreover, low interest rates will lead to an increase in the capital output ratio, a low return on capital and high leverage. We show that these forecasts are in line with what has happened in major advanced countries.
Keywords:
WP; gross investment; cost of capital; Monetary policy; potential output; Solow-Swan; investment; investment rate; capital consumption; GDP growth; potential GDP; capital output ratio; Capital productivity; Production growth; Stocks; Labor force participation; Europe
Cover IMF Working Papers
Heterogeneity and Persistence in Returns to Wealth
Andreas Fagereng
,
Luigi Guiso
,
Mr. Davide Malacrino
, and
Luigi Pistaferri
We provide a systematic analysis of the properties of individual returns to wealth using twelve years of population data from Norway’s administrative tax records. We document a number of novel results. First, during our sample period individuals earn markedly different average returns on their financial assets (a standard deviation of 14%) and on their net worth (a standard deviation of 8%). Second, heterogeneity in returns does not arise merely from differences in the allocation of wealth between safe and risky assets: returns are heterogeneous even within asset classes. Third, returns are positively correlated with wealth: moving from the 10th to the 90th percentile of the financial wealth distribution increases the return by 3 percentage points - and by 17 percentage points when the same exercise is performed for the return to net worth. Fourth, wealth returns exhibit substantial persistence over time. We argue that while this persistence partly reflects stable differences in risk exposure and assets scale, it also reflects persistent heterogeneity in sophistication and financial information, as well as entrepreneurial talent. Finally, wealth returns are (mildly) correlated across generations. We discuss the implications of these findings for several strands of the wealth inequality debate.
Keywords:
WP; private equity; expected return; long-term debt; wealth distribution; Wealth inequality; returns to wealth; net worth; heterogeneity; intergenerational mobility; financial wealth; wealth return regression; return heterogeneity; book value; portfolio return; assets return; heterogeneity channel; market value; risk tolerance; wealth share; return on assets; Income distribution; Stocks; Housing; Capital income; Income
Cover IMF Working Papers
China’s Rising IQ (Innovation Quotient) and Growth: Firm-level Evidence
Hui He
,
Ms. Nan Li
, and
Jing Fang
This paper examines whether the rapid growing firm patenting activity in China is associated with real economic outcome by building a unique dataset uniting detailed firm balance sheet information with firm patent data for the period of 1998-2007. We find strong evidence that within-firm increases in patent stock are associated with increases in firm size, exports, and more interestingly, total factor productivity and new product revenue share. Event studies using first-time patentees as the treatment group and non-patenting firms selected based on Propensity-Score Matching method as the control group also demonstrate similar effects following initial patent application. We also find that although state-owned enterprises (SOEs) on average have lower level of productivity and are less innovative compared to their non-state-owned peers, increases in patent stock tend to be associated with higher productivity growth among SOEs, especially for patents with lower innovative content. The latter could reflect the preferential government policies enjoyed by SOEs.
Keywords:
WP; state-owned enterprise; patenting firm; patent stock; Innovation; Growth; Patent; R&D; Productivity; SOE Reforms; China; production performance; leverage ratio; patent scope; ownership status; data combination; Total factor productivity; Stocks; Capital productivity; Public enterprises
Cover IMF Working Papers
Efficiency-Adjusted Public Capital and Growth
Mr. Sanjeev Gupta
,
Mr. Alvar Kangur
,
Mr. Abdoul A Wane
, and
Mr. Chris Papageorgiou
This paper constructs an efficiency-adjusted public capital stock series and re-examines the public capital and growth relationship for 52 developing countries. The results show that public capital is a significant contributor to economic growth. Although the estimated coefficient for the income share of public capital is larger in middle- than in low-income countries, the opposite is true for the marginal product of public capital. The quality of public investment, as measured by variables capturing the adequacy of project selection and implementation, are statistically significant in explaining variations in economic growth, a result mainly driven by low-income countries.
Keywords:
WP; production function; public capital; Public capital stock; public investment efficiency; appraisal; selection; implementation; evaluation of public investment; growth accounting; investment process; ICRG investment profile; process carry; investment effort; management process; Public investment spending; Stocks; Capital productivity; Estimation techniques
Cover IMF Working Papers
Imperfect Capital Mobility in an Open Economy Model of Capital Accumulation
Mr. Vladimir Klyuev
This paper introduces a tractable capital market friction mechanism that allows a break of the parity between domestic and external interest rates and generates a gradual evolution of capital stock and other macroeconomic variables-in contrast to the instantaneous convergence found in models with interest rate parity. The friction, derived from explicit microfoundations, is such that the cost of new loans is an increasing function of net borrowing.
Keywords:
WP; interest rate
Cover IMF Working Papers
Capital Operating Time and total Factor Productivity Growth in France
Mr. Francisco d Nadal De Simone
and
Mr. Luc Everaert
Data on the weekly operating time of capital improve the measurement of effective capital input in production. The production function of the French business sector is found to be consistent with a Cobb-Douglas technology under constant returns to scale. Total factor productivity growth, estimated as an unobservable variable, has declined steadily since the late 1970s, but more slowly since 1994. During the 1990s, a secular increase in shift work raised the operating time of capital and began to contribute positively to growth, albeit only slightly.
Keywords:
WP; Capital stock utilization; total factor productivity; labor organization; TFP growth; Cobb-Douglas production function; business sector; capital service; output elasticity; A. production function specification; Productivity; Capacity utilization; Stocks
Cover IMF Staff Country Reports
United States: Selected Issues
International Monetary Fund
This Selected Issues paper focuses on the adoption of new technology and globalization in the United States of America, and assesses the change in the productivity growth and revised estimates, the developments in the labor market, equity prices, and the technology boom. The paper analyzes how the monetary policy influences economic conditions in emergency markets; reviews the developments in financial consolidation; discusses the key provisions contained in the Gramm-Leach-Bliley (GLB) Act, the implications of the GLB Act for financial consolidation, and regulatory and supervisory practices.
Keywords:
ISCR; CR; employment growth; price-earnings ratio; earnings; H-P filter; equity-risk premium; productivity growth; production function approach; labor force growth; Total factor productivity; Labor productivity; Productivity; Labor force; Wages; North America; Global; Northern Europe; East Asia
Cover IMF Working Papers
Public Capital and Output Growth in Portugal: An Empirical Analysis
Ms. Jenny E Ligthart
The paper investigates the growth effects of public capital in Portugal using annual data for the period 1965-95. Both a production function and a vector autoregressive model are estimated. Public capital is shown to be a significant long-term determinant of output growth. The size of the estimated production elasticity indicates, in line with studies for other countries, a substantial growth payoff from public investment. Disaggregating public capital shows that investment related to, among other things, roads, railways, and airports is more productive than public investment in other major categories.
Keywords:
WP; capital stock; public capital; capital; cointegration; granger causality; infrastructure; public investment; Engle-Granger result; least squares; constant returns to scale; output effect; time series; utilization rate; Public investment and public-private partnerships (PPP); Stocks; Vector autoregression; Government debt management; Capital productivity
Cover IMF Working Papers
Adjustment Costs, Irreversibility and Investment Patterns in African Manufacturing
Mr. Arne L Bigsten
This paper examines dynamic patterns of investment in Cameroon, Ghana, Kenya, Zambia and Zimbabwe, assessing the consistency of those patterns with different adjustment cost structures. Using survey data on manufactured firms, we document the importance of zero investment episodes and lumpy investment. The proportion of firms experiencing large investment spikes is significant in explaining aggregate manufacturing investment. Taken together, evidence from descriptive statistics, average investment regressions modeling the response to capital imbalance, and transition data analysis indicate that irreversibility is an important factor considered by firms when making investment plans. The picture is not unanimous however, and some explanations for the mixed results are proposed.
Keywords:
WP; adjustment cost; cost function; investment rate; African manufacturing; investment; adjustment costs; duration dependence; nonparametric methods; unobserved heterogeneity; firm investment model; investment spike; mandated investment; investment behavior; Stocks; Manufacturing; Agroindustries; Employment; Logit models; Sub-Saharan Africa