01802cas a2200241 a 4500 AALejournalIMF000493 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451856781 1018-5941 BD-DhAAL BD-DhAAL Johnson, Omotunde. Policy Reform, Adjustment Costs, and Investment : With Activity of Local Investors as a Signal / Omotunde Johnson. Washington, D.C. : International Monetary Fund, 1997. 1 online resource (21 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Adjustment assistance is provided to local investors responding to policy reform and facing adjustment costs, to facilitate their activity-a signal to foreign investors about the profitability of investing in the local economy. The government, in providing assistance, maximizes its utility subject to its budgetary constraint, taking into account the utility forgone in alternative uses of budgetary funds. Foreign investors use the signal to update beliefs about investors in the local economy and compute the expected return from investing in the country. The investment response of foreign investors depends on the expected return so computed relative to the expected returns in their alternative investments worldwide. Mode of access: Internet IMF Working Papers; Working Paper ; No. 1997/148 Full text available on IMF http://elibrary.imf.org/view/journals/001/1997/148/001.1997.issue-148-en.xml IMF e-Library