Uncertainty appears to vary strongly over time, temporarily rising by up to 200% around major shocks like the Cuban … Missile crisis, the assassination of JFK and 9/11. This paper offers the first structural framework to analyze uncertainty …. The parameterized model is then used to simulate a macro uncertainty shock, which produces a rapid drop and rebound in …

Uncertainty appears to vary strongly over time, temporarily rising by up to 200% around major shocks like the Cuban … Missile crisis, the assassination of JFK and 9/11. This paper offers the first structural framework to analyze uncertainty …. The parameterized model is then used to simulate a macro uncertainty shock, which produces a rapid drop and rebound in …

A growing body of evidence suggests that uncertainty is counter cyclical, rising sharply in recessions and falling in … booms. But what is the causal relationship between uncertainty and growth? To identify this we construct cross country panel …

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 …

This paper investigates how firms manage their cash savings, financing, and investment when aggregate uncertainty is … time-varying. I develop and estimate a dynamic model featuring aggregate uncertainty shocks, costly external financing … to wait, both of which interact with time-varying uncertainty and are reinforced by state-dependent risk premia. My model …

macroeconomic and idiosyncratic sources of uncertainty. We develop a structural model of a firm's value maximization problem that … predicts a negative relationship between uncertainty and optimal levels of borrowing. This proposition is tested using a panel … confirm that as either form of uncertainty increases, firms decrease their levels of short-term leverage. This effect is …

that firms increase their liquidity ratios when macroeconomic uncertainty or idiosyncratic uncertainty increases. …This paper investigates the link between the optimal level of non- financial firms’ liquid assets and uncertainty. We … develop a partial equilibrium model of precautionary demand for liquid assets showing that firms change their liquidity ratio …