Uncertainty and Investment Behaviour in the Democratic Republic of Congo
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Date
2011-01
Authors
Ndiwulu, Xavier Bitemo
Journal Title
Journal ISSN
Volume Title
Publisher
AERC
Abstract
The aim of this study was to assess the impact of uncertainty on private investment
in the Democratic Republic of Congo (DRC). We conducted an econometric analysis
based on a flexible accelerator model of investment spending. The results showed that
both macroeconomic uncertainty, as measured by the conditional variance of inflation,
and political uncertainty had a negative impact on investment rates. The two main
policy implications of these results are: First, stabilization policies, and especially
their credibility, are essential to promote private investment in DRC; and second, the
government should adopt policies which help to reduce the risk of reverting to conflict.
Description
HC 955 .B58 2011
Keywords
Investments - Congo ( democratic republic) , Macroeconomic uncertainty , political risk , irreversibility, , Democratic Republic of Congo.