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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
develop a macro-financial structural model with two novel features. First, we include idiosyncratic and aggregate risk in a …
Persistent link: https://www.econbiz.de/10012391995
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
improved since the mid-1980s; that private investment is mostly influenced by the risk of expropriation, the degree of civil …This paper provides empirical support for the view that enhanced economic security fosters private investment and … liberty, and the degree of independence of the bureaucracy; and that economic growth is affected by the risk of expropriation …
Persistent link: https://www.econbiz.de/10014400780
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
This paper studies the effect of demographic change on national saving, global interest rates, and international capital flows, focusing on the role of the public pension system. We develop a small open economy overlapping generations model to illustrate the channels through which demographic...
Persistent link: https://www.econbiz.de/10011978553
Persistent link: https://www.econbiz.de/10009572356
Persistent link: https://www.econbiz.de/10009572374
Since the global financial crisis, corporate investment has been weak in India. Sluggish corporate investment would not …, this paper analyzes the reasons for the slowdown and discusses how India can boost corporate investment, using both macro … investment but that they do not appear to account fully for recent weak performance, suggesting a key role of the bu …
Persistent link: https://www.econbiz.de/10009572430