We derive robust predictions on the effects of uncertainty on short run investment dynamics in a broad class of models … with (partial) irreversibility. When their environment becomes more uncertain firms become more cautious and less … of the capital stock is ambiguous. An investment model is estimated to test these theoretical predictions using a panel …

options and irreversibility, however, are shown to play an important role in the short run dynamics of investment and labor …This paper shows that, contrary to common beliefs, the real options effect of uncertainty plays no role in the long run … rate of investment. This is proven for both the standard investment model with Cobb-Douglas production and Brownian motion …

Many commentators argue that uncertainty about tax, spending, monetary and regulatory policy slowed the recovery from … the 2007-2009 recession. To investigate this we develop a new index of economic policy uncertainty (EPU), built on three … components: the frequency of newspaper references to economic policy uncertainty, the number of federal tax code provisions set …

explore corporate data to investigate how economic uncertainty affected investment, dividend payouts and cash holdings, based … of England. These data demonstrate that heightened economic uncertainty lowered investment even after controlling for … investment opportunities, sales growth, and the firm's own stock volatility. Economic uncertainty also explains the rise in cash …

options and irreversibility, however, are shown to play an important role in the short run dynamics of investment and labor …This paper shows that, contrary to common beliefs, the real options effect of uncertainty plays no role in the long run … rate of investment. This is proven for both the standard investment model with Cobb-Douglas production and Brownian motion …

This Paper investigates the empirical relationship between uncertainty and investment dynamics. This is motivated by … can be detected as a smaller impact of sales growth on investment for firms facing higher uncertainty. Using a stock … the real options literature, which suggests a weaker response of investment to demand shocks at higher levels of …

. Fifth, our survey evidence suggests that elevated uncertainty is exerting only mild restraint on capital investment plans …We examine several measures of uncertainty to make five points. First, equity market traders and executives at … nonfinancial firms have shared similar assessments about one-year-ahead uncertainty since the pandemic struck. Both the one …

. Fifth, our survey evidence suggests that elevated uncertainty is exerting only mild restraint on capital investment plans …We examine several measures of uncertainty to make five points. First, equity market traders and executives at … nonfinancial firms have shared similar assessments about one-year-ahead uncertainty since the pandemic struck. Both the one …

We construct a new index of uncertainty — the World Uncertainty Index (WUI) — for 143 individual countries on a … quarterly basis from 1996 onwards. This is defined using the frequency of the word “uncertainty” in the quarterly Economist …, El Niño, European border crisis, UK Brexit vote and the 2016 US election. Uncertainty spikes tend to be more synchronized …

We propose uncertainty shocks as a new shock that drives business cycles. First, we demonstrate that microeconomic … uncertainty is robustly countercyclical, rising sharply during recessions, particularly during the Great Recession of 2007 …-2009. Second, we quantify the impact of timevarying uncertainty on the economy in a dynamic stochastic general equilibrium model …