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 … volatility measures related to domestic policies or to external factors. As the various volatility measures tend to be positively …

find that policy uncertainty raises stock price volatility and reduces investment and employment in policy …We develop a new index of economic policy uncertainty (EPU) based on newspaper coverage frequency. Several types of …-related economic uncertainty. Our US index spikes near tight presidential elections, Gulf Wars I and II, the 9/11 attacks, the failure …

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

shocks to aggregate uncertainty, I introduce a small, time-varying risk of economic disaster in a standard real business … probability of disaster leads to a collapse of investment and a recession, an increase in risk spreads, and a decrease in the … risk of disaster does not affect the path of macroeconomic aggregates - a "separation theorem" between macroeconomic …

's value, and I use it to show how these two types of uncertainty have very different effects on investment decisions. As an …I study irreversible investment decisions when projects take time to complete, and are subject to two types of … uncertainty over the cost of completion. The first is technical uncertainty, i.e., uncertainty over the amount of time, effort …

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 new economic policy uncertainty (EPU) indices for Japan from January 1987 onwards, building on the approach … pertaining to the economy, policy matters, and uncertainty. Our overall EPU index co-varies positively with implied volatilities … for Japanese equities, exchange rates and interest rates and with a survey-based measure of political uncertainty. The EPU …

investment; the impact of uncertainty on investment occurs primarily through changes in credit spreads; and innovations in credit … spreads have a strong effect on investment, irrespective of the level of uncertainty. These findings raise a question …Micro- and macro-level evidence indicates that fluctuations in idiosyncratic uncertainty have a large effect on …

We develop an integrated theory of investment, seasoned equity offerings (SEOs), liquidation, and corporate savings … under uncertainty for a financially constrained firm, which features endogenous growth options, abandonment options, and … payout policies. Facing costly external financing, the firm prefers to fund its investment internally, so that its optimal …

aggregate investment. We find that the volatility of the marginal profitability of capital - a summary measure of uncertainty …A recent literature suggests that because investment expenditures are irreversible and can be delayed, they may be … highly sensitive to uncertainty. We briefly summarize the theory, stressing its empirical implications. We then use cross …