Abstract
The article proposes and tests the hypothesis that agents who feel uncertainty reduce investment in their business. The theoretical basis for this hypothesis goes back to the ideas of J.M. Keynes and his followers. According to these ideas, uncertainty is not measurable, and investment is determined by “cheerfulness”. We hypothesize that a strong sense of uncertainty can narrow the planning horizon – giving rise to investor myopia – and reduce the “degree of cheerfulness”, thereby reducing investment. Unique data on perceptions of uncertainty and incentives to invest were obtained from surveys of more than 400 heads of enterprises in Saint Petersburg and Leningrad Oblast in March 2018. Econometric analysis shows that this hypothesis cannot be rejected.
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