Wait-and-See: Investment Options under Policy Uncertainty
NBER Working Paper No. 19630
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
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