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Exploring the role of uncertainty for corporate investment decisions in Germany
von Kalckreuth, Ulf - 2000
The impact of uncertainty on firms' investment outlays is subject to an ongoing debate. Theory identifies several channels. Irreversibility, financing constraints and risk aversion make a negative relationship between uncertainty and investment likely. On the other hand, the ability of firms to...
Persistent link: https://www.econbiz.de/10010295693
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On Environmental Taxation under Uncertainty
Blomquist, Sören; Aronsson, Thomas - 1999
This paper addresses optimal taxation, when the relationship between consumption and environmental damage is uncertain and treated as a random variable by policy makers. The main purpose is to analyze how additional uncertainty about this relationship affects the optimal unit tax on the...
Persistent link: https://www.econbiz.de/10010321768
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Policy uncertainty and aggregate fluctuations
Mumtaz, Haroon; Surico, Paolo - 2013
This paper estimates the impact on the US economy of four types of uncertainty about (i) government spending, (ii) tax changes, (iii) public debt sustainability and (iv) monetary policy. Following a one standard deviation shock, uncertainty about debt sustainability has the largest and most...
Persistent link: https://www.econbiz.de/10010368163
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Short-term decisions under long-term uncertainty
Tol, Richard S. J. - 1997
The behaviour of future policy-makers substantially influences future greenhouse gas emissions. Uncertainty about the … motives of future policy-makers may thus strongly influence the climate policy strategies of current policy-makers. Analytical … accumulated over a prolonged period of time, and if future policy-makers tend, with a certain chance, to a less ambitious climate …
Persistent link: https://www.econbiz.de/10011608362
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Income risk, coping strategies and safety nets
Dercon, Stefan - 2002
High income risk is part of life in developing countries. Climatic risks, economic fluctuations, but also a large number of individual-specific shocks make these households vulnerable to serious hardship. For example, details are given on the various shocks and events causing serious hardship to...
Persistent link: https://www.econbiz.de/10010279294
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Targeting and informal insurance
Ligon, Ethan - 2002
The standard method of testing for efficient risk-sharing in village economies does not allow one to identify vulnerable households, only to make statements about the average risk in the village, or of sub-groups identifiable on the basis of observables. Here, by working directly with...
Persistent link: https://www.econbiz.de/10010279311
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Riskiness, Risk Aversion, and Risk Sharing: Cooperation in a Dynamic Insurance Game
Laczó, Sarolta - 2008
This paper examines how cooperation in an insurance game depends on risk preferences and the riskiness of income. It considers a dynamic game where commitment is limited, and characterizes the level of cooperation as measured by the reciprocal of the discount factor above which perfect risk...
Persistent link: https://www.econbiz.de/10010494384
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An economic index of riskiness
Aumann, Robert J.; Serrano, Roberto - 2006
Define the riskiness of a gamble as the reciprocal of the absolute risk aversion (ARA) of an individual with constant ARA who is indifferent between taking and not taking that gamble. We characterize this index by axioms, chief among them a “duality” axiom which, roughly speaking, asserts...
Persistent link: https://www.econbiz.de/10010318897
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Confidence interval estimation tasks and the economics of overconfidence
Cesarini, David; Sandewall, Örjan; Johannesson, Magnus - 2003
Experiments in psychology, where subjects estimate confidence intervals to a series of factual questions, have shown that individuals report far too narrow intervals. This has been interpreted as evidence of overconfidence in the preciseness of knowledge, a potentially serious violation of the...
Persistent link: https://www.econbiz.de/10010281394
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Endogenous growth, the distribution of wealth, and optimal policy under incomplete markets and idiosyncratic risk
Clemens, Christiane; Heinemann, Maik - 2012
This paper combines the standard incomplete markets model of uninsurable idiosyncratic risks and borrowing constraints with the Arrow/Romer approach to endogenous growth to analyze the interaction of risk, growth, and inequality, the latter also endogenously determined in equilibrium. We derive...
Persistent link: https://www.econbiz.de/10010282062