Inflation And Cost-Benefit Analysis
AbstractOne of the most frequent errors made in the preparation of investment project evaluations arises out of the improper accounting for the impact of inflation on the financial and economic performance of a potential project. In this case of commercial projects it is not uncommon to find the returns to the owner of the project (either private sector, government, or public enterprise) underestimated or overestimated by 50 percent or more simply as a result of the use of incorrect procedures in accounting for expected inflation. Similarly, in economic appraisals of projects, economists usually have ignored the financing and liquidity constraints which inflation imposes on the investment and operation of projects even when the realized rate of inflation is equal to the rate anticipated.
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Bibliographic InfoPaper provided by JDI Executive Programs in its series Development Discussion Papers with number 1978-08.
Length: 23 pages
Date of creation: Sep 1978
Date of revision:
Cost-Benefit Analysis; Inflation;
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- H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
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- Glenn Jenkins, 1981. "An International Comparative Analysis Of The Taxation Of The Steel Industry," Development Discussion Papers 1981-07, JDI Executive Programs.
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