The effect of inflation on growth investments: A note

Authors

  • Clovis De Faro Fundação Getúlio Vargas

DOI:

https://doi.org/10.24201/ee.v13i1.239

Keywords:

inflation, no-reinvestment, BV

Abstract

Motivated by the pioneering work of Brenner and Venetia (1983), henceforth designated as BV, a previous note that focused attention on the effect of taxation on the optimal duration of investments in a non-inflationary environment (de Faro, 1996), the present note is aimed at investigating the effects of inflation on the optimal duration of investments. Specifically, considering the no-reinvestment case only, our objective is to include in the analysis both a numerical illustration of the peculiar results of BV as well as indexation procedures that have been used in some high inflation economies.

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References

Brenner, Menachem and Itzak Venetia (1983). “The Effects of Inflation and Taxes on Growth Investment and Replacement Policies”, Journal of Finance, 38, pp. 1519-1528.

Faro, Clovis de (1996), “The Effect of Taxes on Growth Investments: A Note”, Revista de Análisis Económico, 11, pp. 139-142.

Fishlow, Albert (1974). “Indexing Brazilian Style: Inflation without Tears?”, Brookings Papers on Economic Activity, 1, pp. 261-280.

Hirshleifer, J. (1970). Investment, Interest and Capital, N. J., Prentice-Hall, Inc., Englewood Cliffs.

Holanda, Fernando (1993). “La indización de los activos financieros: la experiencia brasileña”, in L. F. Jiménez (ed.), Indización de activos financieros: experiencias latinoamericanas – Argentina, Brasil, Colombia, Chile y Uruguay, Proyecto conjunto CEPAL/ Gobierno de Holanda, SRV Impresos, Chile.

Simon, Carl P. and Lawrence Blume (1994). Mathematics for Economists, New York, W. W. Norton & Co., Inc.

Simonsen, Mario H. (1983). “Indexation: Current Theory and Brazilian Experience”, in Rudiger Dornbusch y M. H. Simonsen (eds.), Inflation, Debt and Indexation, The MIT Press.

Simonsen, Mario H. (1995). 30 Anos de Indexação, Brasil, Editora da Fundação Getulio Vargas.

Varian, Hal R. (1990). Intermediate Microeconomics: A Modern Approach, 2nd. ed., New York, W. W. Norton & Co., Inc.

Varian, Hal R. (1992). Microeconomic Analysis, 3rd ed., New York, W. W. Norton & Co., Inc.

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Published

1998-01-01

How to Cite

De Faro, C. (1998). The effect of inflation on growth investments: A note. Estudios Económicos De El Colegio De México, 13(1), 81–91. https://doi.org/10.24201/ee.v13i1.239
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Issue

25-vol. 13, no. 1, january-june, 1998

Section

Articles

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