Essays on Uncertainty, Imperfect Information, and Investment Dynamics

Understanding how imperfect information affects firms' investment decision helps answer important questions in economics, such as how we may better measure economic uncertainty; how firms' forecasts would affect their decision-making when their beliefs are not backed by economic fundamentals; and how important are the business cycle impacts of changes in firms' productivity uncertainty in an environment of incomplete information. This dissertation provides a synthetic answer to all these questions, both empirically and theoretically. The first chapter, provides empirical evidence to demonstrate that survey-based forecast dispersion identifies a distinctive type of second moment shocks different from the canonical volatility shocks to productivity, i.e. uncertainty shocks. Such forecast disagreement disturbances can affect the distribution of firm-level beliefs regardless of whether or not belief changes are backed by changes in economic fundamentals. At the aggregate level, innovations that increase the dispersion of firms' forecasts lead to persistent declines in aggregate investment and output, which are followed by a slow recovery. On the contrary, the larger dispersion of future firm-specific productivity innovations, the standard way to measure economic uncertainty, delivers the ``wait and see" effect, such that aggregate investment experiences a sharp decline, followed by a quick rebound, and then overshoots. At the firm level, data uncovers that more productive firms increase investments given rises in productivity dispersion for the future, whereas investments drop when firms disagree more about the well-being of their future business conditions. These findings challenge the view that the dispersion of the firms' heterogeneous beliefs captures the concept of economic uncertainty, defined by a model of uncertainty shocks. The second chapter presents a general equilibrium model of heterogeneous firms subject to the real productivity uncertainty shocks and informational disagreement shocks. As firms cannot perfectly disentangle aggregate from idiosyncratic productivity because of imperfect information, information quality thus drives the wedge of difference between the unobserved productivity fundamentals, and the firms' beliefs about how productive they are. Distribution of the firms' beliefs is no longer perfectly aligned with the distribution of firm-level productivity across firms. This model not only explains why, at the macro and micro level, disagreement shocks are different from uncertainty shocks, as documented in Chapter 1, but helps reconcile a key challenge faced by the standard framework to study economic uncertainty: a trade-off between sizable business cycle effects due to changes in uncertainty, and the right amount of pro-cyclicality of firm-level investment rate dispersion, as measured by its correlation with the output cycles.

The Oud Across Arabic Culture

This study is a compilation and compendium of information on the oud, the most important instrument in Arabic classical music. It has grown out of my own long-time involvement in studying and playing the oud, and in particular out of my interest in the lack of sources and knowledge available to the vast majority of oud players and researchers, as well as for the readers. My own path started from an intensive study of the oud, which included exposure to several treaties; some housed in museums around the globe, and some only available in the Arabic language. The study combines archival research (including Arabic poetry and pre-Islamic Era and medieval treaties), symbolism, new archaeological discoveries, field interviews, and analysis of existing scholarship, and draws on my professional performance experience for detailed stylistic analysis of the oud's performance practice and its historical development. The study consists of participant observation, personal performance, and interviews conducted in person, via telephone, and/or via e-mail, according to the choice of the performers. The performers have been selected from networks of musicians who perform regularly at lounges, concert halls, and private events. These performers have been chosen according to their musical knowledge, technical skill, experience, and activity in Arabic music and oud performance. Chapter one deals with the purpose of this study and the methods of investigation, as well as giving a brief overview of the history of the oud. In addition, there will be an introduction to the Arabic musical system (mâqâm), which is primarily based on the mechanics and sound production of the oud. Chapter two deals with the oud in Arabic sources: the first source is Arabic poetry in the pre-Islamic Era. The second source is Arabic poetry in the medieval era, in which I found a significant number of poets who allude to the oud, providing accurate descriptions of the player, singers, and the scenes within the contexts of oud performance. The third source is the Arab scholars' intensive treatises with meticulous accounts of the instrument's apparatii, including descriptions and measurements of the parts, strings, and tuning. While chapter three deals with the classification, the development of the oud, chapter four deals with topics such as: the symbolism of the oud and its relation to cosmology, astronomy, mathematics and anatomy. In most of the pertinent Arabic writings, philosophers mention a significant correlation between the oud and the other sciences. Chapter five deals with recreating the performance practice of the oud. A case study of the oud performers focuses on their style, technique, training, and personal experiences. Topics such as improvisation and ornamentation, the oud in the Arabic musical ensemble, the social uses and functions, and gender in musical performance practices will be included in detailed analysis. Other important topics will be analyzed such as traditional vs. modern technique, and the repertoire of the oud. Specifically, in regard to technique, the study outline the style of the music, the role of the oud in Arabic ensembles, the function of the oud in music composition, and the form of the ensembles in Arabic performance and practice.