Browsing by Subject "investment"

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  • Bank of Finland (2021)
    Bank of Finland. Bulletin 5/2021
    The economy is continuing to recover from the steep downturn caused by the COVID-19 pandemic. The recovery is, however, being slowed by a worsening of the virus situation, shortfalls in raw materials and electronics components, and an increase in the general level of prices measured by the inflation rate. Economic growth will continue to be bolstered particularly by household spending on goods and services and investment by businesses. Once we have recovered from the recession, the pace of growth will slow, as the long-term outlook for the Finnish economy is overshadowed by the ageing population and the slow pace of labour productivity growth.
  • Bank of Finland (2019)
    Bank of Finland. Bulletin 5/2018
    Finnish growth will continue, but at a slower pace than in recent years. There is no returning to the growth rate that preceded the financial crisis.
  • Bank of Finland (2018)
    Bank of Finland. Bulletin 3/2018
    Finland's economic growth will continue and remain broadly based. Strong global demand, improved cost-competitiveness, growth in household income and favourable financing conditions will all support growth over the forecast period. GDP growth forecasts for 2018–2020 stand at 2.9%, 2.2% and 1.7%. The declining growth rate in the immediate years ahead reflects the moderate long-term outlook for growth. Inflation will remain close to 1% over the years 2018–2019 before gathering pace and reaching 1.5% in 2020.
  • Li, Delong; Lu, Lei; Mu, Congming; Yang, Jinqiang (2019)
    Bank of Finland Research Discussion Papers 18/2019
    Overconfidence and overextrapolation are two behavioral biases that are pervasive in human thinking. A long line of research documents that such biases influence business decisions by distorting managers' expected productivity. We propose a new mechanism in which the biases change firms' precautionary motives when external financing is costly, finding that the influences of biases on investment, payouts, and refinancing are stronger for financially weaker firms. Moreover, biased and rational firms display di erential responses to economic booms and busts holding financial positions constant. Our work illustrates that managerial traits, when interacting with imperfect capital markets, drive firm dynamics in business cycles.
  • Simola, Heli (2016)
    BOFIT Policy Brief 6/2016
    The economic cooperation between Russia and China has increased notably during past couple of decades, although from a very low level. Despite the increase, economic dependency between countries remains relatively low and it is rather a one-sided dependency of Russia from China than a deeper inter-dependency. The economic relations have largely been characterized by traditional trade based on comparative advantage, whereas investment flows between countries have been relatively small. Since Russia’s relations with the western countries have deteriorated, it has aimed at closer ties with China. The high-level relations are probably better than ever, but in practice the development has been more modest. Economic cooperation between Russia and China is likely to continue increasing gradually, but there are many challenges for deepening the relations and raising mutual inter-dependency.
  • Bank of Finland (2017)
    Bank of Finland. Bulletin 5/2017
    The Finnish economy entered a phase of cyclical recovery in mid-2015. After several years of contraction and zero growth, Finnish GDP grew by 1.9% in 2016. Growth has continued to accelerate during the course of 2017. The current cyclical upturn has been supported by growth in exports and investment. Finland’s economy has also benefited from the broader recoveries seen in both the euro area and the global economy.
  • Mäki-Fränti, Petri; Obstbaum, Meri (2018)
    Bank of Finland. Bulletin 3/2018
    The protraction of the recession following the financial crisis weakened Finland's growth potential, while population ageing and the accumulation of public debt continue to weigh on growth prospects. In spite of the economy's recent recovery, long-term growth is expected to remain below its pre-crisis level, averaging 1.5% per annum over 2026–2040.
  • Bank of Finland (2021)
    Bank of Finland. Bulletin 5/2021
    An ageing population and weak productivity trend are depressing Finland’s economic growth prospects. The Bank of Finland’s new long-term forecast suggests growth will be around 1.2% per annum in the period 2021–2040, and will slow thereafter. If current trends in population growth and education continue, there is a danger that human capital will start to decline in the 2040s. The trend in human capital can still be influenced through investment in education and more robust incentives for acquiring skills, participating in the labour force and increasing the birth rate. Furthermore, increased immigration of skilled workers would help boost human capital more quickly than policies that relate to the indigenous workforce alone.
  • Bank of Finland (2018)
    Bank of Finland. Bulletin 3/2018
    According to the most recent quarterly national accounts, Finland’s GDP in the first quarter of 2018 grew 1.2% quarter-on-quarter and 3.1% year-on-year. The data signal similar economic developments for early 2018 to those previously estimated, i.e. the economy continued its strong growth. Private investment in particular increased as building and investment in machinery continued to grow at a brisk pace. GDP growth in the first quarter of 2018 was only slightly stronger than suggested by the flash estimate published in May, while GDP figures for the fourth quarter of 2017 were revised upwards. The Finnish economy has now grown for ten consecutive quarters.
  • Lv, Bingyang; Liu, Yongzheng; Li, Yan; Ding, Siying (2018)
    BOFIT Discussion Papers 20/2018
    This paper explores how fiscal incentives offered to local governments in China affect investment rates in their jurisdictions. Theoretically, we build a simple fiscal competition model to establish the linkage between local fiscal incentives and expenditure policy and consequently, capital movement. The key prediction of the model, borne out by data from Chinese provinces spanning 2004–2013, is that an increase in the local corporate income tax-sharing ratio, which proxies fiscal incentives offered to local governments, motivates local governments to compete for capital investment through increased public expenditures. Our results contribute to the fiscal federalism literature by showing that local fiscal incentives significantly shape policy choices and local economic performance. In addition, by exploring fiscal incentives offered to local governments, we offer a novel explanation for the unusually high investment rate in China that has been sustained over a prolonged period of time.
  • Korhonen, Iikka; Simola, Heli (2022)
    BOFIT Policy Brief 2/2022
    Published in Asian Economic Papers online
    In this note, we review recent data concerning Russia’s economic integration with other countries. We first analyze the general picture of Russia’s economic integration with the rest of the world and the importance of foreign economic relations for the country. We then turn to China, an increasingly significant economic partner for Russia. The European Union remains Russia’s most important trading partner and is by far the most important source of foreign direct investment to Russia as well as sources of other financing. China’s importance to Russia has also increased, especially with respect to merchandise trade.
  • Lindblad, Annika; Sariola, Mikko; Silvo, Aino (2020)
    Bank of Finland. Bulletin 5/2019
    Global uncertainty is weakening growth in business fixed investment in Finland, and its impacts may be felt with a lag. Cyclical fluctuations caused by the uncertainty, however, conceal domestic, structural factors that have weakened investment throughout the 2000s. These factors include weak productivity growth, population ageing and structural changes in the economy towards a services economy. Productivity, in particular, can be influenced by many economic policy measures. Of these measures, innovation policy, for example, plays an important role.
  • Verona, Fabio (2020)
    Oxford Bulletin of Economics and Statistics 2
    Published in BoF DP 26/2017.
    The investment literature has long acknowledged the time- and frequency-varying dynamics of the relationship between investment, Tobin’s Q and cash flow. In this paper, we use continuous wavelet tools to estimate and assess the relationship between these variables simultaneously at different frequencies and over time. We find that i) Q and cash flow are complementary sources of information for investment, the former being more important for firms’ investment decisions in the medium-to-long run and the latter at business cycles frequencies and ii) investment-Q sensitivity declines over time at all frequencies, while investment-cash flow sensitivity declines at business cycles frequencies but remains largely stable over the medium-to-long run.
  • Bank of Finland (2017)
    Bank of Finland. Bulletin 3/2017
    Finnish exports have lost market share in world trade continually since the financial crisis. This partly reflects a general trend in the advanced economies. The export shares of advanced economies have contracted as emerging economies have gained a stronger foothold in the global economy. The dwindling demand for Finnish exports may also be related to the current low level of investment in the advanced economies, especially in Europe.
  • Kokkonen, Arto; Mäki-Fränti, Petri; Silvo, Aino (2019)
    Bank of Finland. Bulletin 3/2019
    The pace of labour productivity growth in Finland has faded. This is attributable to lacklustre productivity development in manufacturing as well as the increasing dominance of services in the economy.
  • Verona, Fabio (2017)
    Bank of Finland Research Discussion Papers 26/2017
    Pulished in Oxford Bulletin of Economics and Statistics as "Investment, Tobin’s Q, and cash flow across time and frequencies" 2019 ; 82 ; 2 ; 331-346 ;
    The empirical performance of the Q theory of investment can be significantly improved by simultaneously considering the time- and the frequency-varying features of the investment-Q relationship. Using continuous wavelet tools, I assess the investment-Q sensitivity at different frequencies and its evolution over time, as well as the interaction of the financial cycle with the Q theory. The results show that there is a positive, stable medium-to-long-run relationship between investment and Q that begins after a positive, stable long-run relationship between credit and Q materializes. In such case, credit leads and slowly fuels the stock price boom.
  • Bank of Finland (2010)
    Editorial+Financial accelerator and investment in a small open economy in a currency union+Dynamic stochastic general equilibrium model for China
  • Ilves, Jarno (2018)
    Bank of Finland Bulletin. Blog
  • Aaltonen, Markus (2021)
    Bank of Finland. Bulletin 1/2021
    The stock of buy-to-let mortgages stood at EUR 8.1 billion at the end of March 2021, comprising 7.9% of the total stock of housing loans. It is estimated that buy-to-let mortgages have grown faster than the rest of the housing loan stock since the global financial crisis. Buy-to-let mortgages are smaller than residential mortgages and have shorter repayment periods. In March 2021 the average interest rate applied on new buy-to-let mortgages was higher than on residential mortgages, but lower than the rate applied on housing company loans.
  • Bank of Finland (2015)
    Bank of Finland. Bulletin 4/2015
    Structural reforms are playing an increasingly important role in the recovery of long-term outlook for growth. Globally, growth has been slow since the Great Recession. Reasons for this have been sought from both supply- and demand-side factors. At least some of the problems are structural and cannot be addressed with counter-cyclical stimulus policies.