The Allocation of Resources under Uncertainty

Harris Dellas () and Ana Fernandes

Diskussionsschriften from Universitaet Bern, Departement Volkswirtschaft

Abstract: We study the effects of uncertainty on the allocation of resources in the standard, static, general equilibrium, two-sector, two-factor model. The elasticity of substitution in production vs that in consumption plays a key role in determining whether uncertainty attracts or repels resources. Risk aversion matters, but to a smaller extent, while factor endowments and factor intensities play a more limited role.

Keywords: Uncertainty; general equilibrium; two-sector model (search for similar items in EconPapers)
JEL-codes: D5 D8 E2 (search for similar items in EconPapers)
Date: 2006-12
New Economics Papers: this item is included in nep-mac and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:ube:dpvwib:dp0606

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