Financial uncertainty and business investment

Engelbert Stockhammer and Lucas Grafl

No 123, Department of Economics Working Paper Series from WU Vienna University of Economics and Business

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. (author´s abstract)

Keywords: business investment; uncertainty; financial instability; Keynesian economics; financial systems (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (2)

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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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