spillover and timeinconsistency. We find that both distortions reduce the equilibrium asset return and delay investment in … financial incentives, implemented in our model by a regulator and by a long-term investment fund. The regulator commands carbon … pricing and the fund provides subsidies to reduce technology costs or to boost investment returns. The investment subsidy …

significant amplifying role for market uncertainty in the relation between sentiment and aggregate investment. A one …-standard-deviation increase in uncertainty more than doubles the effect of sentiment on investment. Moreover, allowing uncertainty …, and investment measures. We also document similar effects for aggregate equity issuance. Consistent with theory, we find …