Uncertainty and Investment Dynamics
Clicks: 2
ID: 291246
2007
Article Quality & Performance Metrics
Overall Quality
Not rated
Combines reader engagement with the AI quality analysis. This
article has not been analysed, so there is no overall score —
reader engagement is measured and shown alongside.
Reader Engagement
0.0
/100
2 views
0 readers
AI Quality Assessment
Not analyzed
Readership in this journal
Ranked #41 of 193 articles by views in The Review of Economic Studies
Most read
Least read
Bar heights use a square-root scale. Only the 120 most-read articles are drawn; the journal has 193 in total.
Mint this article as an NFT
Not yet mintedCreate a permanent, verifiable on-chain record of this article on the Scimatic Network. The NFT is held in your Journament account, and you can withdraw it to your own wallet at any time.
5
SUSD
one-off · no wallet required
Abstract
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 decisions and time, and also empirically for a panel of manufacturing firms.These cautionary effects of uncertainty are large -going from the lower quartile to the upper quartile of the uncertainty distribution typically halves the first year investment response to demand shocks.This implies the responsiveness of firms to any given policy stimulus may be much lower in periods of high uncertainty, such as after major shocks like OPEC I and 9/11.
| Reference Key |
openalex_W3023597126
Use this key to autocite in the manuscript while using
SciMatic Manuscript Manager or Thesis Manager
|
|---|---|
| Authors | Nick Bloom, Stephen Bond, John Van Reenen |
| Journal | The Review of Economic Studies |
| Year | 2007 |
| DOI |
10.1111/j.1467-937x.2007.00426.x
|
| URL | |
| Keywords | Keywords not found |
Citations
No citations found. To add a citation, contact the admin at info@scimatic.org
Comments
No comments yet. Be the first to comment on this article.