Macroeconomic Instability and Private Investment in Sudan (1980 – 2000): an Empirical Investigation

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Date
2015-06-16
Authors
Tarig Abdelgadir Ismail, Ismail
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Publisher
UOFK
Abstract
Recent literature suggests that macroeconomic instability is detrimental to private investment. The Study briefly summarizes these findings stressing the empirical approaches for measuring macroeconomic instability. We then use a time-series data set for the period 1980 – 2000 to investigate the empirical relationship between macroeconomic instability and private investment in Sudan. We focus on five key macroeconomic variables: inflation, exchange rate, GDP growth, current account, and budget deficit employing an econometric technique (The GARCH Model) to estimate their variability. The results of this study suggest that macroeconomic instability has a negative impact on private investment. Moreover, the results also show that among the five key macroeconomic variables in question only inflation, exchange rate and GDP growth significantly influence private investment, which confirm that inflationary pressures experienced in 1990s were one of the most important factors that contributes to the instability of the national economy
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75page
Keywords
Macroeconomic Instability and Private Investment in Sudan (1980 – 2000): An Empirical Investigation
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