02141cas a2200289 a 4500 AALejournalIMF021397 230101c9999 xx r poo 0 0eng d 5.00 USD 9781513563275 1018-5941 BD-DhAAL BD-DhAAL Confidence as a Driver of Private Investment in Selected Countries of Central America. Washington, D.C. : International Monetary Fund, 2020. 1 online resource (31 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 This paper argues that structural weaknesses may make private investment particularly sensitive to business confidence relative to other traditional investment drivers and global shocks. It gauges the importance of confidence over recent years in selected countries in Central America, including Costa Rica, the Dominican Republic, El Salvador, and Guatemala. Using a vector error correction model to carry out the empirical work, a system representing global activity and the domestic economy, including a set of investment drivers (interest rates, unit labor costs, and confidence) is analyzed. The findings suggest that confidence has been, on average, the most important driver of investment in these countries, exceeded only by global factors. Since confidence, arguably, can be influenced by policymakers' decisions, structural reforms to improve the business climate and reduce uncertainty play an important role in promoting investment and economic growth. Mode of access: Internet Confidence imf Determinants Of Investment imf Uncertainty imf VAR imf VECM imf IMF Working Papers; Working Paper ; No. 2020/270 Full text available on IMF http://elibrary.imf.org/view/journals/001/2020/270/001.2020.issue-270-en.xml IMF e-Library