NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Wait-and-See: Investment Options under Policy Uncertainty

Nancy L. Stokey

NBER Working Paper No. 19630
Issued in November 2013
NBER Program(s):   EFG

This paper develops a model of investment decisions in which uncertainty about a one-time change in tax policy induces the firm to temporarily stop investing--to adopt a wait-and-see policy. After the uncertainty is resolved, the firm exploits the tabled projects, generating a temporary investment boom.

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Document Object Identifier (DOI): 10.3386/w19630

Published: Review of Economic Dynamics Available online 9 June 2015 In Press, Corrected Proof — Note to users Cover image Wait-and-see: Investment options under policy uncertainty Nancy L. Stokey1,

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