Is time-varying firm-level uncertainty a major cause or amplifier of the business cycle? This paper investigates this … adjustment, where cyclical changes in uncertainty correspond naturally to cyclical changes in the cross-sectional dispersion of …-level uncertainty varies over the cycle. This allows us to put empirical discipline on our numerical simulations. We find that, while …

-level investment is procyclical. We show that a heterogeneous-firm RBC model with quantitatively realistic countercyclically disperse … state investment rate distribution, produces investment dispersion that positively comoves with the cycle, with a …

Is time-varying firm-level uncertainty a major cause or amplifier of the business cycle? This paper investigates this … adjustment, where cyclical changes in uncertainty correspond naturally to cyclical changes in the cross-sectional dispersion of … firm-level uncertainty varies over the cycle. This allows us to put empirical discipline on our numerical simulations. We …

of firm-level investment is procyclical. We show that a heterogeneousfirm RBC model with quantitatively realistic … of the steady state investment rate distribution, produces investment dispersion that positively comoves with the cycle …

Recent theoretical developments relating to investment under uncertainty have highlighted the importance of … empirical literature which examines uncertainty and threshold effects of investment behaviour. This paper presents a review of … investment, the majority focusing on the relationship between investment flows and proxy measures of uncertainty. A general …

The impact of uncertainty on firms' investment outlays is subject to an ongoing debate. Theory identifies several … channels. Irreversibility, financing constraints and risk aversion make a negative relationship between uncertainty and … investment likely. On the other hand, the ability of firms to adapt after uncertainty is resolved can make a risky strategy more …

The real options tradition originally predicted a decreasing relationship between uncertainty and investment, through … the positive effect of higher uncertainty on the trigger level for revenue relative to costs. An opposing effect on the …. The "opposing" effect is not always opposing. Systematic risk cannot generally be assumed to increase with volatility. A …

This paper experimentally investigates investment behavior.We find that global risk – i.e. risk independent of an agent …’sinvestment decision (like political risk) – substantiallydecreases investment. Also effort to obtain the capital usedfor investment … decreases investment substantially. Theseresults are neither in line with expected utility theory norwith psychologically …

The paper studies the interaction between cyclical uncertainty and investment in a stochastic real option framework … of the link between cyclical uncertainty and investment is quantified using simulations of the model. The chief … shows that macroeconomic risk acts as an important deterrent to investments. …

Non-strategic firms with rational expectations make investment and emissions decisions. The investment rule depends on … taxes create a secondary distortion at the investment stage, unless a particular condition holds; emissions quotas do not …-house gases. The endogeneity of investment favors taxes, and it increases abatement. …