Does Uncertainty Affect Investment Expenditure? A Comment

Cantillo, Andres (2011): Does Uncertainty Affect Investment Expenditure? A Comment.

Abstract

This is a theoretic and econometric assessment of Peter Ferderer’s seminal paper published in the Journal of Post Keynesian Economics with the same title in 1993. New data shows that high forecaster discords coincide with a decrease in Investment expenditure. Specifically, the forecaster discord about the aggregate level of employment explains an important part of the fluctuations in investment. Even if the forecaster discords are included in models based on Tobin’s q, they play an important role.

• Item Type: MPRA Paper
• Language: English
• Keywords: Macroeconomics, Uncertainty, Expectations.
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General; C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C10 - General; C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C11 - Bayesian Analysis: General; E - Macroeconomics and Monetary Economics > E0 - General; E - Macroeconomics and Monetary Economics > E0 - General > E01 - Measurement and Data on National Income and Product Accounts and Wealth ; Environmental Accounts; G - Financial Economics > G0 - General; G - Financial Economics > G1 - General Financial Markets

References

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Ferderer, P. (1993). Does Uncertainty Affect Investment Spending? Journal of Post Keynesina Economics , 19-35.

Tobin, J. (1969). A General Equilibrium Approach to Monetary Theory. Journal of Money, Credit and Banking , 15-29.