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Cuadernos de Economía
Print version ISSN 0121-4772
Abstract
MERNIES, Bibiana Lanzilotta. Business expectations: Implications on growth in Uruguay. Cuad. Econ. [online]. 2015, vol.34, n.65, pp.423-442. ISSN 0121-4772. https://doi.org/10.15446/cuad.econ.v34n65.45932.
This paper examines how expectations affect business growth, the dynamics of investment and employment at the aggregate level, in the context of a growth model with the extended Solow expectations. It proves that the growth elasticity of investment with respect to expectations is significantly higher than for the occupation. The results show nonlinearities in the dynamics of short-term adjustment between expectations and investment.
Keywords : Expectations and growth; investment and employment; Granger causality.