The Allocation of Resources under Uncertainty

We study the effects of uncertainty on the allocation of resources in the standard, static, general equilibrium, two-sector, two-factor model. The elasticity of substitution in production vs that in consumption plays a key role in determining whether uncertainty attracts or repels resources. Risk aversion matters, but to a smaller extent, while factor endowments and factor intensities play a more limited role.

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Year of publication:	2006-12
Authors:	Dellas, Harris ; Fernandes, Ana
Institutions:	Department Volkswirtschaftlehre, Universität Bern
Subject:	Uncertainty \| general equilibrium \| two-sector model

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Extent:	application/pdf
Series:	Diskussionsschriften.
Type of publication:	Book / Working Paper
Language:	English
Classification:	E2 - Consumption, Saving, Production, Employment, and Investment ; D5 - General Equilibrium and Disequilibrium ; D8 - Information and Uncertainty
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005515717