Uncertainty about a possible harm is obviously relevant in deciding how much to regulate. More surprisingly, however, risks that are completely unrelated to the subject of the regulation can also be important. In particular, uncertainties about the future trajectory and distribution of economic...

This paper studies the effect of oil discoveries on economic growth in Brazilian municipalities for the period from 1940 to 2000. It uses a unique identification strategy which exploits data on the drilling of approximately 20,000 oil wells in Brazil since oil explorations began in the country....