This paper shows that, with (partial) irreversibility, higher uncertainty reduces the impact effect of demand shocks on … investment. Uncertainty increases real option values making firms more cautious when investing or disinvesting. This is confirmed … both numerically for a model with a rich mix of adjustment costs, time-varying uncertainty, and aggregation over investment …

ideological divide, the US seems destined to heightened levels of policy uncertainty for many years to come. Some research … suggests that such uncertainty, particularly over economic policy, partly explains the sluggish nature of the recovery in … America – and - according to one recent study, restoring policy uncertainty to levels that prevailed before the financial …