We study the effects of monetary-policy-induced changes in Tobin's q on corporate investment and capital structure. We … evidence, and quantify the relevance for monetary transmission to aggregate investment …

, scope, and investment decisions, and we outline their connection to recent macroeconomic and financial trends in the US …

interest rates. We use data for manufacturing firms in Spain between 1999 and 2012 to document a significant increase in the …

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

consumption, portfolio allocation, financing, investment, and business exit decisions. The optimal capital structure is determined …. More risk-averse entrepreneurs default earlier, but also choose higher leverage, even though leverage makes his equity more … risky. Non-diversified entrepreneurs demand both systematic and idiosyncratic risk premium. Cash-out option and external …

investment. Uncertainty increases real option values making firms more cautious when investing or disinvesting. This is confirmed … both numerically for a model with a rich mix of adjustment costs, time-varying uncertainty, and aggregation over investment … investment response to demand shocks. This implies the responsiveness of firms to any given policy stimulus may be much lower in …

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 …

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 …