Uncertainty-Induced Reallocations and Growth /
Bansal, Ravi.
Uncertainty-Induced Reallocations and Growth / Ravi Bansal, Mariano Max Croce, Wenxi Liao, Samuel Rosen. - Cambridge, Mass. National Bureau of Economic Research 2019. - 1 online resource: illustrations (black and white); - NBER working paper series no. w26248 . - Working Paper Series (National Bureau of Economic Research) no. w26248. .
September 2019.
Focusing on both micro and aggregate U.S. data, we show the existence of a significant link between aggregate uncertainty and reallocation of resources away from R&D-intensive capital. This link is important because a decrease in the aggregate share of R&D-oriented capital forecasts lower medium-term growth. In a multi-sector production economy in which (i) growth is endogenously supported by risky R&D investments, and (ii) the representative agent is volatility-risk averse and has access to other safer technologies that do not support growth, uncertainty shocks have a first-order negative impact on medium-term growth and welfare.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.
Uncertainty-Induced Reallocations and Growth / Ravi Bansal, Mariano Max Croce, Wenxi Liao, Samuel Rosen. - Cambridge, Mass. National Bureau of Economic Research 2019. - 1 online resource: illustrations (black and white); - NBER working paper series no. w26248 . - Working Paper Series (National Bureau of Economic Research) no. w26248. .
September 2019.
Focusing on both micro and aggregate U.S. data, we show the existence of a significant link between aggregate uncertainty and reallocation of resources away from R&D-intensive capital. This link is important because a decrease in the aggregate share of R&D-oriented capital forecasts lower medium-term growth. In a multi-sector production economy in which (i) growth is endogenously supported by risky R&D investments, and (ii) the representative agent is volatility-risk averse and has access to other safer technologies that do not support growth, uncertainty shocks have a first-order negative impact on medium-term growth and welfare.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.