Title: Investment dynamics in advanced economies: Evidence from a Bayesian panel VAR
Authors: Bjoern van Roye - European Central Bank (Germany) [presenting]
Ramon Gomez-Salvador - European Central Bank (Germany)
Abstract: The importance of business investment dynamics is shown to vary across in Advanced Economies (AE). To account for heterogeneity across AEs, we use a Bayesian Panel VAR in linear hierarchical form. While business investment is not particularly low in the United States, the United Kingdom and Japan, growth has been persistently low in a number of European countries. We show that although there is a common component in political uncertainty, financial conditions, demand expectations and firm profitability across countries, the importance of the drivers remain substantially heterogeneous and depend on the individual country's structure.