to long-run uncertainty than investment, and in turn investment is relatively more sensitive to long-run uncertainty than … show that lower depreciation rates and higher adjustment costs lead R&D and investment to be more sensitive to longer … be particularly damaging to growth by reducing R&D and investment …

What is the best way to incorporate a risk premium into the discount rate schedule for a real investment project with … uncertain payoffs? The standard CAPM formula suggests a beta-weighted average of the return on a safe investment and the mean … return on an economy-wide representative risky investment. Suppose, though, that the project constitutes a tail …

public sector, it may be economically rational for those at risk not to invest in protective measures. Risk management …. These may include multi-year insurance contracts, well-enforced regulations, third-party inspections, and alternative risk …

returns by aggregate investment and valuation ratios; and v) a downward sloping term structure of risk premia for dividend … firm characteristics - Tobin's Q, past investment, earnings-price ratios, market betas, and idiosyncratic volatility of … the firm's exposure to IST shocks and risk premia. Our calibrated model replicates: i) the predictability of returns by …

Romer's model of a dependent economy, where foreign direct investment is needed to enable the importation of capital goods …-averse entrepreneurs discount using a 'hurdle rate' that exceeds the risk-free interest rate. The gap between the two rates increases with … the uncertainty embodied in the investment, being determined by the vagueness of the information and by the range of …

values and optimal investment decisions. The method is quite general, and is illustrated both analytically and numerically …, on mine values and investment decisions. Although the tax policies are found to have the expected effects on asset values …, the effects on investment decisions are sometimes perverse. An increase in the income tax rate may encourage investment …

This study uncovers a statistically significant negative correlation between volatility and private investment over the … number of different measures, volatility reduces private investment in developing countries. We then show that the … continue to hold even if the coefficient of relative risk aversion approaches zero (that is, even if the marginal utility of …

I study irreversible investment decisions when projects take time to complete, and are subject to two types of …, and materials that will ultimately be required to complete the project, and that is only resolved as the investment … required, and which is external to the firm's investment activity. I derive a simple decision rule that maximizes the firm …

We re-examine the basic investment problem of deciding when to incur a sunk cost to obtain a stochastically fluctuating … benefit. The optimal investment rule satisfies a trade-off between a larger versus a later net benefit; we show that this … demand curve. We reinterpret the optimal investment rule as a markup formula involving an elasticity that has exactly the …

We develop an integrated theory of investment, seasoned equity offerings (SEOs), liquidation, and corporate savings … payout policies. Facing costly external financing, the firm prefers to fund its investment internally, so that its optimal … substantial delay in investment; (4) A financially constrained firm over-invests in early stages of its life-cycle in an effort to …