We study the response of investment to changes in uncertainty about future profits. We find that in industries dominated by small firms, an increase in uncertainty about future profits depresses investment; in all other industries, increased uncertainty has virtually no effect (or has a positive...

This paper examines the relationship between real exchange rates and real interest rates using three different approaches across four currencies and two horizons with 20 years of data. Each approach gives some encouragement that this relationship might hold, but each approach also encounters...

The authors estimate the impact of price uncertainty on investment using a panel of U.S. manufacturing industries. Pooling the data for all industries, uncertainty has no impact on current investment. However, for industries that have low levels of seller concentration and, thus, are likely to...