In this paper we offer an analysis of the effects of uncertainty about future tax policy on irreversible investment. The main message of the paper is that investment is not much affected by the degreee of tax policy uncertainty. This is true regardless of whether random tax changes are...

As an incentive to increase high-impact investment and boost growth, the German Federal Government is planning to introduce a targeted temporary super depreciation allowance to support much-needed green and digital transitions. Using a calibrated multi-sector DSGE model, we find that the...

Die Bilanz von drei Jahren intensiver Förderpolitik in den neuen Bundesländern fällt gemischt aus. Ein dynamischer Entwicklungsprozeß ist bisher nur in Teilen der ostdeutschen Wirtschaft in Gang gekommen, insbesondere angeregt durch die staatlichen Infrastrukturprogramme im Bausektor und den...

This paper introduces a new approach to understanding investment. The distinctive feature of our approach is that shocks to the economic fundamentals have both persistent and transitory components, and that firms must disentangle the persistent from the transitory shocks. The model generates...