We study business uncertainty in high- versus low-volatility environments by surveying over 31,000 managers across 41 … their mean absolute deviations. Analogously, we measure realized volatility using absolute forecast errors. We establish two … new facts. (1) Subjective uncertainty and realized volatility both decline with GDP per capita. (2) Managers underestimate …

This paper examines novel survey evidence on firms’ beliefs about macroeconomic tail risk and their role in investment … quantitative heterogeneous firm model calibrated to match the survey evidence, firms' concern with tail risk makes fiscal policy …

regularities by developing a new firmbased trade model wherein managers are risk averse. Higher volatility induces the reallocation … are more affected by higher industry-wide expenditure volatility than the least productive exporters. We rationalize these …

where demand shifts stochastically between three different states, each with different rates of drift and volatility. In our … shows that macroeconomic risk acts as an important deterrent to investments. -- business cycles ; real options ; investment …

typically shares in the latter gains via the collection of tax revenues. Hence to the extent the risk discount rate should … reflect the co-variability between the return from public investment and that of the market, we are led to measuring the risk …, 1950-2000, and show that the social risk premium is relatively small vis-à-vis the market. Consequently, the use of the …