Series: IMF Working Papers
Author(s): Jorge Chan-Lau , and Peter Clark
Publisher: INTERNATIONAL MONETARY FUND
Publication Date: 01 August 1998
Keywords: capital flows, irreversible investment, interest rate spread, strategic behavior, capital stock, rate of return, investors, cost of capital
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 investme...