between risk and uncertainty is implemented by applying the Gilboa-Schmeidler maxmin with multiple priors framework to lenders …, ultimate lenders and financial intermediaries. The model is used to investigate the impact of uncertainty about the likelihood … include: (i) An unanticipated increase in bailout uncertainty raises interest rates, the volume of defaults in both the real …

their growth. Economic theory suggests uncertainty can cause firms to delay investments until uncertainty is resolved. We …Firms in many developing countries cite macroeconomic instability and political uncertainty as major constraints to … macroeconomic and political uncertainty. Demand for macroeconomic shock insurance was high; 36.7 percent of microentrepreneurs in …

We study the effects of changes in uncertainty about future fiscal policy on aggregate economic activity. Fiscal … consolidation inevitable, there is considerable uncertainty about the policy mix and timing of such budgetary adjustment. To … evaluate the consequences of this increased uncertainty, we first estimate tax and spending processes for the U.S. that allow …

consensus. Our model deepens the discussion of economic risk and political risk in fiscal federalism, and highlights the related …

political uncertainty commands a risk premium whose magnitude is larger in poorer economic conditions. Political uncertainty …We study the pricing of political uncertainty in a general equilibrium model of government policy choice. We find that …

, uncertainty makes reforms more politically viable and may, under some conditions, increase social welfare. The model is then used …-term limit to governments. The predictions of this theory are consistent with a number of empirical regularities on the … uncertainty is associated to more reforms in a panel of 20 OECD countries. …

We analyze how changes in government policy affect stock prices. Our general equilibrium model features uncertainty … average. The price fall is expected to be large if uncertainty about government policy is large, as well as if the policy … change is preceded by a short or shallow downturn. Policy changes increase volatility, risk premia, and correlations among …

We study how the labour market and industry uncertainty affect the investment decisions of multinational enterprises … industries. Differences in risk may draw MNEs to different locations. Firm-specific bargaining always offers an advantage, as the … mix of current and future pay fully reflects the firm’s risk profile. …