Optimal Investment Strategies under Demand and Tax Policy Uncertainty

Hjalmar Boehm and Michael Funke

No 311, CESifo Working Paper Series from CESifo

Abstract: In this paper we offer an analysis of the effects of uncertainty about future tax policy on irreversible investment. The main message of the paper is that investment is not much affected by the degreee of tax policy uncertainty. This is true regardless of whether random tax changes are determined endogenously or exogenously. The paper therefore indicates that reducing tax policy uncertainty is probably no magic bullet to increase private investment spending

Keywords: Investment; uncertainty; irreversibility; taxation (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_311

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