Showing 1 - 10 of 15
We analyze the impact of trade policy uncertainty on investment in the euro area. Our identification strategy assumes … that countries that are relatively more dependent on global trade networks exhibit a higher sensitivity of investment with … respect to trade uncertainty. We find that the investment-to-GDP ratio is on average 0.8 percentage points lower for five …
Persistent link: https://www.econbiz.de/10011978678
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 …
Persistent link: https://www.econbiz.de/10014396572
uncertainty using options contracts. VAR analysis shows that the investment response to an uncertainty shock of average magnitude … in the sample is strong and persistent: the cumulative fall in investment from trend at a one-year horizon ranges 2 …-5.8 percentage points; and it takes between 1 1\2 and 2 years for investment to return to its trend level. Empirical ranges depend on …
Persistent link: https://www.econbiz.de/10011715577
irreversible investment are more exposed to policy uncertainty. In sectors with large irreversible investment EPU has a greater … effect on growth, investment, and leverage. The results are robust to different definitions of investment irreversibility …
Persistent link: https://www.econbiz.de/10011978593
This paper provides empirical support for the view that enhanced economic security fosters private investment and … improved since the mid-1980s; that private investment is mostly influenced by the risk of expropriation, the degree of civil …
Persistent link: https://www.econbiz.de/10014400780
Panel data on Ghanaian manufacturing firms are used to test predictions from models of irreversible investment under …, higher uncertainty raises the hurdle level that triggers investment, and uncertainty has a negative effect on investment … levels that is greater for firms with more irreversible investment …
Persistent link: https://www.econbiz.de/10014403297
We investigate the conditions for sustainability of debt roll-over schemes under uncertainty. In contrast with the requirements identified in recent research, we show that a necessary and sufficient condition for sustainability of such schemes is that the asymptotic interest rate on government...
Persistent link: https://www.econbiz.de/10014398012
This paper attempts to identify the indicators that can demonstrate the vulnerabilities in systemically important financial institutions. The paper finds that (i) indicators on leverage, liquidity, and business scope can help identify the differences between the intervened and non-intervened...
Persistent link: https://www.econbiz.de/10014399365
We augment a linearized dynamic stochastic general equilibrium (DSGE) model with a tractable endogenous risk mechanism, to support the joint analysis of monetary and macroprudential policy. This state dependent conditional heteroskedasticity mechanism specifies the conditional variances of...
Persistent link: https://www.econbiz.de/10012300643