This paper presents estimates of the e¤ects of uncertainty on both short run investment behaviour and long run capital accumulation for panels of African and Asian …rms. We estimate structural investment models in which the level of uncertainty in‡uences investment behaviour through di¤erent forms of adjustment costs: partial irreversibility, a …xed cost of undertaking any investment at all, an...

This paper proposes a new mechanism to explain the dynamics of asset return volatility. Random shocks to asset fundamentals arrive according to a Poisson process. Financial analysts gradually reduce the uncertainty created by a shock subject to capacity constraints or cost of effort associated with processing information. In the short-run, analysts work at their maximum capacity to digest the s...

A binary sequence satisfies a one-dimensional (d; k) run length constraint if every run of zeros has length at least d and at most k. A two-dimensional binary pattern is (d1; k1; d2; k2)-constrained if it satisfies the one-dimensional (d1; k1) run length constraint horizontally and the one-dimensional (d2; k2) run length constraint vertically. For given d1; k1; d2, and k2, the asymmetric two-di...

Studies that seek to evaluate the e¤ects of technology shocks often employ structural VARs identi…ed with long-run restrictions. In the presence of a mismatch between the number of lags the data-generating process involves and the number of lags included in the VAR, estimates based on long-run restrictions can be largely biased. In this paper, I o¤er an alternative method that substantially red...

In traditional reputation theory, reputation is good for the longrun player. In "Bad Reputation," Ely and Valimaki give an example in which reputation is unambiguously bad. This paper characterizes a more general class of games in which that insight holds, and presents some examples to illustrate when the bad reputation effect does and does not play a role. The key properties are that participa...

_________________________________________________________________________ Capital accumulation and creative destruction is modeled together with risk-averse households. The novel aspect—risk-averse households—allows to use well-known models not only for analyzing long-run growth as in the literature but also short-run fluctuations. The model remains analytically tractable due to a very convenie...