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Book Cover
E-book
Author Chan-Lau, Jorge A., author

Title Fixed Investment and Capital Flows - a Real Options Approach
Published Washington : International Monetary Fund Aug. 1998

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Description 1 online resource (265 pages)
Summary Annotation This paper draws a link between international capital flows and the real options approach to investment by extending a model of real estate investment. It explains gradual investment, investment booms, and investment during recessions and emphasizes sunk costs, uncertainty, and the value of waiting. the optimal waiting time increases as foreign borrowing becomes more expensive because higher returns are required to cover the sunk costs of investing. the lower the initial level of profitability, the more likely investment will be sequential; conversely, a relatively high initial rate of return will be associated with simultaneous investment
Form Electronic book
Author Clark, Peter B., author
ISBN 9781451937398
1451937393