Financial uncertainty and business investment

Engelbert Stockhammer and Lucas Grafl ()
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Lucas Grafl: Department of Economics, Vienna University of Economics & B.A.

Department of Economics Working Papers from Vienna University of Economics and Business, Department of Economics

Abstract: The paper seeks to contribute to the empirical analysis of financial uncertainty and investment from a Post Keynesian perspective. The paper uses the volatility of the exchange rate, the volatility of the stock market index, and the real gold price as indicators for financial uncertainty. An increase in the volatility of a variable is a sufficient, but not a necessary condition for an increase in uncertainty (regarding this variable). The effects of changes in uncertainty on investment are investigated econometrically for the USA, the UK, the Netherlands, Germany, and France. Financial uncertainty has significant negative effects in the USA and the Netherlands.

JEL-codes: E12 E20 E22 E25 E61 (search for similar items in EconPapers)
Date: 2008-08
New Economics Papers: this item is included in nep-mac and nep-pke
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Related works:
Journal Article: Financial Uncertainty and Business Investment (2010)
Working Paper: Financial uncertainty and business investment (2008)
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