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 …

the parameters that determine the distribution of the expected returns on investment. During a crisis that increases … macroeconomic uncertainty and reduces asset prices, the threshold required return that triggers investment is lower for an informed … investment may increase, is mostly by informed investors, and as time goes on is progressively more by investors who were …

the parameters that determine the distribution of the expected returns on investment. During a crisis that increases … macroeconomic uncertainty and reduces asset prices, the threshold required return that triggers investment is lower for an informed … investment may increase, is mostly by informed investors, and as time goes on is progressively more by investors who were …

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. -- business cycles ; real options ; investment …