Saltari, Enrico and Ticchi, Davide Incertezza e investimenti. Rivista internazionale di scienze sociali , 109 (2). pp. 199-213. ISSN 0035-676X (2001)Full text not available from this repository.
The paper proposes a dynamic partial equilibrium model where competitive firms with constant return to scale technology are risk averse. Firms are subject to output price uncertainty. We show that it is possible that the investment-uncertainty relationship is positive even when firms have a high degree of risk aversion. Indeed, the paper shows that risk aversion can explain the negative relationship between investment and uncertainty only in a static context. In a dynamic framework, the linkage between periods can lead risk aversion to have a positive effect on investment when uncertainty increases. Moreover, the paper shows that investment should be positively correlated with uncertainty for reasonable values of the preference and technological parameters.
|Uncontrolled Keywords:||Investment; Uncertainty; Risk aversion|
|Subjects:||H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor > HD61 Risk Management
|Research Area:||Economics and Institutional Change|
|Depositing User:||Prof Davide Ticchi|
|Date Deposited:||09 Aug 2011 10:28|
|Last Modified:||12 Aug 2011 15:18|
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