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Risk Aversion and Determinants of Stock Market Behavior

Pindyck, Robert S. - 1986

for the observed behavior of the stockmarket? Second, how risk averse are investors in the aggregate?We find that the … less so. Estimates of the index of relative risk aversion are obtained that put that parameter in the range of 3 to 4 …

Persistent link: https://www.econbiz.de/10012477153

What We Know and Don't Know about Climate Change, and Implications for Policy

Pindyck, Robert S. - 2020

There is a lot we know about climate change, but there is also a lot we don't know. Even if we knew how much CO2 will be emitted over the coming decades, we wouldn't know how much temperatures will rise as a result. And even if we could predict the extent of warming that will occur, we can say...

Persistent link: https://www.econbiz.de/10012481498

Uncertainty In Environmental Economics

Pindyck, Robert S. - 2006

In a world of certainty, the design of environmental policy is relatively straightforward, and boils down to maximizing the present value of the flow of social benefits minus costs. But the real world is one of considerable uncertainty -- over the physical and ecological impact of pollution,...

Persistent link: https://www.econbiz.de/10012465909

A Markup Interpretation of Optimal Rules for Irreversible Investment

Dixit, Avinash - 1997

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 trade-off is closely analogous to the standard...

Persistent link: https://www.econbiz.de/10012472850

Economic Instability and Aggregate Investment

Pindyck, Robert S. - 1993

A recent literature suggests that because investment expenditures are irreversible and can be delayed, they may be highly sensitive to uncertainty. We briefly summarize the theory, stressing its empirical implications. We then use cross-section and time-series data for a set of developing and...

Persistent link: https://www.econbiz.de/10012474573

Investments of Uncertain Cost

Pindyck, Robert S. - 1992

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...

Persistent link: https://www.econbiz.de/10012474793

Uncertainty, Investment, and Industry Evolution

Caballero, Ricardo J. - 1992

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 firms' entry decisions, and we describe the resulting...

Persistent link: https://www.econbiz.de/10012474808

Irreversibility, Uncertainty, and Investment

Pindyck, Robert S. - 1990

especially sensitive to risk, whether with respect to future cash flows, interest rates, or the ultimate cost of the investment …

Persistent link: https://www.econbiz.de/10012475728

The Use and Misuse of Models for Climate Policy

Pindyck, Robert S. - 2015

In recent articles, I have argued that integrated assessment models (IAMs) have flaws that make them close to useless as tools for policy analysis. IAM-based analyses of climate policy create a perception of knowledge and precision that is illusory, and can fool policy-makers into thinking that...

Persistent link: https://www.econbiz.de/10012457569

Risk and Return in Environmental Economics

Pindyck, Robert S. - 2012

I examine the risk/return tradeoff for environmental investments, and its implications for policy choice. Consider a … risk? Using a simple model of a stock externality (e.g., temperature) that evolves stochastically, I examine the … combinations of risk and expected returns as policy objectives. Given cost estimates for reducing risk and increasing expected …

Persistent link: https://www.econbiz.de/10012460398