I study irreversible investment decisions when projects take time to complete, and are subject to two types of … uncertainty over the cost of completion. The first is technical uncertainty, i.e., uncertainty over the amount of time, effort …, and materials that will ultimately be required to complete the project, and that is only resolved as the investment …

options on incremental units of capital; we show how the values of these options affect the firm's investment decisions …

Using country- and region-level data, I investigate the effect of HIV/AIDS on fertility in Africa during 1985 …

We re-examine the basic investment problem of deciding when to incur a sunk cost to obtain a stochastically fluctuating … benefit. The optimal investment rule satisfies a trade-off between a larger versus a later net benefit; we show that this … demand curve. We reinterpret the optimal investment rule as a markup formula involving an elasticity that has exactly the …

Capital investment decisions must recognize the limitations on the firm's ability later to sell off or expand capacity … to the q-theory of investment, and how these options affect the incentive to invest. Generally, the option to expand … effect of uncertainty on investment, how these option values change in response to shifts of the distribution of future …

A recent literature suggests that because investment expenditures are irreversible and can be delayed, they may be … aggregate investment. We find that the volatility of the marginal profitability of capital - a summary measure of uncertainty … - affects investment as the theory suggests, but the size of the effect is moderate, and is greatest for developing countries …

We study the effects of aggregate and idiosyncratic uncertainty on the entry of firms, total investment, and prices in … a competitive industry with irreversible investment. We first use standard dynamic programming methods to determine …

We quantify the role of financial factors that have contributed to sluggish investment in Europe in the aftermath of … investment in the aftermath of the crisis can be linked to higher leverage, increased debt service, and having a relationship … with a weak bank--once we condition on aggregate demand shocks. Second, the relation between leverage and investment …