Financial Reporting under Economic Policy Uncertainty

Monetary Policy under Financial Uncertainty ∗

This paper considers the role of monetary policy in mitigating the effects of financial crises. I suppose that the economy occasionally but infrequently experiences crises, where financial variables directly affect the broader real economy. I analyze the formulation of monetary policy under such financial uncertainty, where policymakers recognize the possibility of financial crises, which leads...

Corporate Financial Policy and the Value of Cash under Uncertainty

In this paper we provide evidence on how firm-specific and macroeconomic uncertainty affects shareholders’ valuation of a firm’s cash holdings. This extends previous work on this issue by highlighting the importance of the source of uncertainty. Our findings indicate that increases in firm-specific risk generally increase the value of cash while increases in macroeconomic risk generally decreas...

Economic Rationality under Uncertainty

Though uncertainty pervades all aspects of life and human action, it has a rather short history in economics. Surprisingly, Daniel Bernoulli’s (1738) notion of expected utility, which suggests that (in games of chance) monetary risky ventures ought to be evaluated by the sum of utilities of outcomes weighted by the corresponding probabilities, was not immediately used in economic theory. Indeed...

Environmental Policy Aid Under Uncertainty

Strategic Trade Policy under Uncertainty

This paper extends the Brander-Spencer (1985) model by considering market uncertainty, exploring nonlinear policy, and examining ̄rms' choices of strategic variables. By investigating the interrelationship between trade policy and market conduct, we ̄nd that unlike the oftenstudied linear policy, a nonlinear policy can in°uence the domestic ̄rm's choice of strategic variables and hence alter th...