activity on optimal consumption and investment. Here, learning introduces two sources of risk about future payoffs: structural … uncertainty and uncertainty from the anticipation of learning. The latter renders control and learning nonseparable. We present … decreases optimal consumption are provided. The effect depends on the strengths and directions of the two sources of risk, which …

stagnation of household consumption during the 1990s and find that the stagnation of household disposable income, the decline in … household wealth, and increased uncertainty about the future are among the contributing factors. Finally, I consider whether …

The Treasury has, at times, suggested giving greater consideration to reforms to narrow the Saving-Investment gap … what policy reforms could help to narrow the Saving-Investment gap in New Zealand. Lower per capita growth in the capital … suggests a need for a significantly higher rate of national saving. Previous recommendations to boost national saving have …

The Treasury has, at times, suggested giving greater consideration to reforms to narrow the Saving-Investment gap … what policy reforms could help to narrow the Saving-Investment gap in New Zealand. Lower per capita growth in the capital … suggests a need for a significantly higher rate of national saving. Previous recommendations to boost national saving have …

We present an intertemporal consumption model of consumer investment in financial literacy. Consumers benefit from such … depreciates over time and has a cost in terms of current consumption, the model determines an optimal investment in literacy. The … aggregate data, we find a strong effect of financial literacy on wealth accumulation and national saving, and also show that …

We present a model of firm investment under uncertainty and partial irreversibility in which uncertainty is represented … by a jump diffusion. This allows to represent both the continuous Gaussian volatility and the discontinuous uncertainty … related to information arrival, sudden changes and large shocks. The model shows how both sources of uncertainty negatively …

We derive robust predictions on the effects of uncertainty on short run investment dynamics in a broad class of models … of UK firms and a stock returns-based measure of uncertainty. As predicted we find that uncertainty reduces firms …

We provide theoretical and empirical evidence that policy uncertainty can significantly affect firm level investment … and entry decisions in the context of international trade. When market entry costs are sunk, policy uncertainty can create … a real option value of waiting to enter foreign markets until conditions improve or uncertainty is resolved. Using a …

This paper shows that, with (partial) irreversibility, higher uncertainty reduces the impact effect of demand shocks on … 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 …