BUSINESS EXPECTATIONS AND DECISIONS: MACROECONOMIC IMPLICATIONS FOR URUGUAY
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Abstract
This article studies the macroeconomic implications of entrepreneurial expectations for business activity, investment, and employment. It tests the hypothesis of asymmetry in agents’ reaction to expectations depending on whether the existing macroeconomic context is adverse or favorable. The empirical analysis is based on time series tools for quarterly data from 1997 to 2012, and the results show that investment adjustment to equilibrium relationships is non-linear. This is quicker in adverse macroeconomic contexts, showing agents’ over-reaction in the face of negative economic news in accordance with the aversion to loss hypothesis.
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How to Cite
Lanzilotta Mernies, B. (2015). BUSINESS EXPECTATIONS AND DECISIONS: MACROECONOMIC IMPLICATIONS FOR URUGUAY. Investigación Económica, 73(287). Retrieved from https://revistas.unam.mx/index.php/rie/article/view/50509
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