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Aggregate uncertainty, investment and asymmetric adjustment in the UK manufacturing sector

Simon Price

Aggregate uncertainty, investment and asymmetric adjustment in the UK manufacturing sector

by Simon Price

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  • 15 Currently reading

Published by University of Essex, Department of Economics in [Colchester] .
Written in English


Edition Notes

Statementby Simon Price.
SeriesEconomics discussion paper series / University of Essex, Department of Economics -- no.441, Economics discussion paper (University of Essex, Department of Economics) -- no.441.
ID Numbers
Open LibraryOL17287952M

Aggregate uncertainty, capacity utilization and manufacturing investment. S Price. Applied Economics 27 (2), Aggregate uncertainty, investment and asymmetric adjustment in the UK manufacturing sector. S Price. Applied Economics 28 (11), , Manufacturing and services both saw decline in Quarter 1 Manufacturing companies. In Quarter 1 (Jan to Mar) , the net rate of return for the manufacturing sector fell to 15% from the revised estimate of % in Quarter 4 (Oct to Dec)

Nonlinear estimation allows us to answer several interesting questions left unanswered by a linear model. For a number of important macroeconomic variables, we show that (i) a positive shock to uncertainty has a greater effect than a negative shock and (ii) the effect of the uncertainty shock is highly dependent on the state of the economy. My paper with Sangyup Choi, Davide Furceri, and Yi Huang on the effects of effect of aggregate uncertainty shocks on sectoral productivity is now forthcoming in the Journal of International Money and Finance and is available () at the JIMF , we find that an increase in aggregate uncertainty reduces productivity growth more in industries that depend heavily on external finance.

  For the TAR consistent model, the threshold value is (). The value of Ф () is greater than () at 5% critical value. Given that the bank lending rate and the money market rate are co-integrated, the study tests for symmetric adjustment (ρ 1 = ρ 2).The F-equality statistics () is less than the critical value () at 5% in South Africa and the F-equality statistics (5. estimate the effect ofsales uncertainty and cost uncertainty on investment demand. Two key results emerge: First, there is a moderately strong and consistentlynegative effect of uncertainty on investment. If both uncertainty indicators are increased by one standard deviation, the estimated investment demand will fall by 6½% of its mean. Second.


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Aggregate uncertainty, investment and asymmetric adjustment in the UK manufacturing sector by Simon Price Download PDF EPUB FB2

(). Aggregate uncertainty, investment and asymmetric adjustment in the UK manufacturing sector. Applied Economics: Vol. 28, No. 11, pp. Cited by: Aggregate uncertainty, investment and asymmetric adjustment in the UK manufacturing sector, ().

An econometric model of exploration and extraction of oil in the UK continental shelf, ().Author: Klaus Mohn and Petter Osmundsen. Aggregate uncertainty, investment and asymmetric adjustment in the UK manufacturing sector by Simon Price 1 edition - first published in Not in Library.

Aggregate uncertainty, investment and asymmetric adjustment in the UK manufacturing sector.” (). An econometric model of manufacturing investment in the UK”, (). and Haltiwanger,J.C.() “Plant-level adjustment and aggregate investment dynamics”, Brookings Papers on Economic Activity 2, Carlin,W and Soskice,DAuthor: Ciaran Driver, Paul Temple and Giovanni Urga.

Aggregate Uncertainty, Investment and Asymmetric Adjustment in the UK Manufacturing Sector. Capital Risk and Models of Investment Behaviour. Price, Simon,Aggregate uncertainty, investment and asymmetric adjustment in the UK manufacturing sector, Applied Econom.

Uncertainty, Investment and Asymmetric Adjustment in the UK Manufacturing Sector, Applied Economics, (). Unit Root Tests in Panel Data: Aggregate uncertainty and Finite Sample Properties.

Aggregate uncertainty, capacity utilization and manufacturing investment, (). Aggregate uncertainty, investment and asymmetric adjustment in the UK manufacturing sector. 1. Introduction.

This paper studies the impact of uncertainty on productivity by testing a specific channel through which uncertainty can affect productivity growth: during periods of high uncertainty, firms that are credit constrained switch the composition of investment by reducing productivity-enhancing investment—such as on information and communication technology (ICT).

Gerard A. Pfann's 89 research works with 2, citations and 4, reads, including: Roads Leading to Self-Employment: Comparing Transgenerational Entrepreneurs and Self-Made Start-Ups.

Aggregate uncertainty, investment and asymmetric adjustment in the UK manufacturing sector. Simon Price. Pages: Growth in Africa: does the source of investment financing matter. Steven J. Most & Hendrik Vann De Berg.

Pages: Published online: 01 Oct Aggregate Uncertainty, Investment and Asymmetric Adjustment in the UK Manufacturing Sector. Article. Nov ; Aggregate Uncertainty, Capacity Utilization and Manufacturing Investment. framework that allows the sign and magnitude of the uncertainty shocks to have asymmetric effects.

Although the theory of the firm allowing for a fixed cost of adjustment indicates that investment acts as a threshold process, aggregating across all firms in the macroeconomy suggests that the region of inaction is actually a smooth process.

Downloadable. This paper documents cyclical asymmetries in the aggregate investment activity of UK industrial and commercial companies. The ability of a model of aggregate activity based on heterogeneous actions under non-convex adjustment at the individual level to account for this feature is then investigated.

Aggregate activity is found to be consistent with non-convex adjustment at the. Ricardo J. Caballero's research works with 7, citations and 4, reads, including: Monetary Policy with Opinionated Markets. the aggregate effect. Inferring the impact of uncertainty on aggregate productivity growth from this micro estimate would require some additional assumptions, as for instance done in Stein and Stone () in their study of the effect of uncertainty on investment using firm-level data.

The rest of the paper is structured as follows. Abel () shows that investment expenditure responds positively to increasing uncertainty, while Pindyck () suggests that the effect of uncertainty on investment depends on the nature of the adjustment costs.

The degree of market competition, however, might also affect the value of the option to delay investment. Fig. 1 highlights the large degree of variation in TPU over time and across industries. We aggregate firm level trade uncertainty by first constructing, for each firm, a dummy variable I i, t T P U that takes value 1 if the transcript mentions trade policy uncertainty (TPU i,t > 0), and 0 otherwise.

The figure shows, for selected years, the share of firms with I i, t T P U = 1 within an. 1. Introduction. In a recent paper Baker et al. () examine whether economic policy uncertainty has intensified the – recession and weakened the recovery. This work is part of a growing literature on the real effects of policy uncertainty that builds on earlier work relating uncertainty to firm-level investment and employment decisions when there are adjustment costs.

uncertainty been in explaining the poor investment performance of UK manufacturing. Second, is the uncertainty reported by survey respondents primarily of a "macro" nature - i.e. a reflection of the volatility of the whole economy - or is it of a more "micro" character, a result of uncertainty at a sectoral level?.

"The Asymmetric Adjustment of Prices: Theory and Evidence from UK Manufacturing," Cambridge Working Papers in EconomicsFaculty of Economics, University of Cambridge. Undated S Holly & M Hashem Pesaran & T Yamagata, "undated". How the economy might adjust in the short term: The first half of Uncertainty: Although the immediate disorderly exit risk has been removed, uncertainty over the UK’s future trading arrangements will remain elevated until details of any trade deal emerge.

Trade: In the transition period, trade will continue without additional frictions.tween investment and uncertainty under asymmetric adjustment costs3 to changes in the degree of competition. In fact, when firms are nearly competitive, the conclusion of Hartman and of Abel holds no matter how asymmetric adjustment costs are.

Studying adjustment-cost mechanisms has a central role in understanding the dynamics.