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...

We study the impact of profit uncertainty on investment and whether or not this response is different in industries that are dominated by small firms versus those that are dominated by relatively larger firms. Our key findings are that the sign of the investment-uncertainty relationship is...

We provide a set of stylized facts on the response of industry nominal wage growth to aggregate and industry- specific influences using annual data for 450 U.S. manufacturing industries over the period 1958 to 1989. We find support for the canonical wage contracts model; the response of nominal...

Using annual data for 450 manufacturing industries over the period 1958 to 1989, we establish the following stylized facts on the response of industry nominal wage growth to aggregate and industry influences: ; 1. We find support for the canonical wage contracts model outlined in Blanchard and...

We provide a set of stylized facts on the response of industry nominal wage growth to aggregate and industry-specific influences using annual data for 450 U.S. manufacturing industries over the period 1958 to 1989. We find support for the canonical wage contracts model the response of nominal...