The Effect of Uncertainty on UK Investment Authorisation : Pooled Estimators vs . Heterogeneous Estimators 1

@inproceedings{Driver2002TheEO,
  title={The Effect of Uncertainty on UK Investment Authorisation : Pooled Estimators vs . Heterogeneous Estimators 1},
  author={Ciaran Driver and Katsushi S. Imai and Paul Temple and Giovanni Urga},
  year={2002}
}
This paper compares pooled models of capital investment with non-pooled models using the UK’s Confederation of British Industry’s (CBI) Industrial Trends Survey for the U.K., particularly focusing on the effect of uncertainty on investment. The uncertainty measure is based on the cross sectional dispersion of expectations. The panel data estimation shows that uncertainty has negative effects, which are nonnegligible in terms of magnitude, on investment. However, if we look at the estimation… CONTINUE READING

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