We study the effects of permanent and temporary income shocks on precautionary saving and investment in a "store … investment, or a "volatility trap." Namely, big savers invest relatively little. In contrast, low volatility of permanent shocks … leads to low precautionary saving and high or low investment, depending on the volatility of temporary shocks. Empirical …

that depreciations boost profits, investment, and sales of firms that are more financially-constrained and have higher … reducing real wages, thereby spurring investment. We show that these effects on firm performance are enduring, including in the …

We show that the response of firm-level investment to real exchange rate movements varies depending on the production … structure of the economy. Firms in advanced economies and in emerging Asia increase investment when the domestic currency … well as some advanced economies with a low degree of structural economic complexity, corporate investment increases when …

constraints and providing a key financing source for public investment in RRDCs, temporary resource revenues might then be … public investment and several frictions that capture pervasive features in RRDCs, including absorptive capacity constraints …, inefficiencies in investment, and borrowing constraints that can be relaxed when natural resources lower the country risk premium …