This essay is inspired by the Argentinean case and it aims at contributing to explaining firm investment behaviour as a consequence of changes in the macroeconomic environment. Investment decisions depend on the relationships between the interest rate, the supply price of capital assets and the expected rate of return from investment. The discussion here focuses on the latter. Expectations about the rate of return depend on facts that are known more or less for certain (e.g. current demand for the production, current prices of inputs, current existence of competitors, etc.) and others that refer to a future state of affairs and therefore need to be forecast. Therefore, the process of forming expectations is a key aspect to be discussed. Based on experimental psychology, this essay argues that actors do not form rational expectations, but decide their future plans through judgment based on inductive reasoning. It is claimed here that the social context feeds into that induction processes.
Versión enviada para su publicación en G. Dutrenit, K. Lee, R. Nelson, L. Soete and A. Vera-Cruz (ed.), Learning, Capability Building and Innovation for Development. Palgrave MacMillan. EADI Global Development Series
Cita: Arza, V., (2013). ’10. The Social Dimension of Behaviour: Macroeconomic Uncertainty and Firms’ Investment in R&D and in Machinery in Argentina’, in G. Dutrenit, K. Lee, R. Nelson, L. Soete and A. Vera-Cruz (ed.), Learning, Capability Building and Innovation for Development. Palgrave MacMillan. EADI Global Development Series, pp.176-201