Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/248939 
Year of Publication: 
2021
Series/Report no.: 
CESifo Working Paper No. 9394
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This paper studies how managers plan under uncertainty. In a new survey panel on German manufacturing firms, we show that uncertainty reflects change: Planning incorporates higher subjective uncertainty about future sales growth when the firm has just experienced unusual growth, and more so if the experience was negative. At the quarterly frequency, subjective uncertainty closely tracks conditional volatility of shocks: Both exhibit an asymmetric V-shaped relationship with past growth. In the cross section of firms, however, subjective uncertainty differs from conditional volatility: planning in successful firms—either large or fast-growing—reflects lower subjective uncertainty than in unsuccessful firms even when the size of the shocks is the same.
Subjects: 
expectation formation
firms
measurement
subjective uncertainty
survey data
JEL: 
C83
D22
E20
E23
Document Type: 
Working Paper
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