Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/338265 
Year of Publication: 
2025
Series/Report no.: 
CESifo Working Paper No. 9394
Version Description: 
This Version: October 2025
Publisher: 
Munich Society for the Promotion of Economic Research - CESifo GmbH, Munich
Abstract: 
This paper studies how managers plan under uncertainty. In a new panel survey of German manufacturing firms, we observe both forecasts of sales growth and a quantitative measure of subjective uncertainty. We show that subjective uncertainty reflects change experienced by firms: it is high when growth is either unusually low or unusually high. Subjective uncertainty is more than conditional volatility: while more volatile firms are typically more uncertain, experienced change alone increases uncertainty, consistent with a model of learning. Uncertainty over our sample is mostly idiosyncratic but varies substantially over time and leads managers to plan lower employment and prices.
Subjects: 
expectation formation
firms
measurement
subjective uncertainty
survey data
JEL: 
C83
D22
E20
E23
Document Type: 
Working Paper
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