Global crisis uncertainty harmed investment – BoE paper

The collapse of Lehman Brothers triggered a period of great uncertainty

The uncertainty triggered by the 2008 financial crisis discouraged business investment and may have contributed to post-crisis productivity weakness, according to research published by the Bank of England on August 24.

The staff working paper, by Pawel Smietanka, Nicholas Bloom and Paul Mizen, draws on more than 10,000 observations of firm data in the years after the crisis to assess how uncertainty affected investment, dividend payouts and cash holdings.

Uncertainty from the 2008 shocks “will

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