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Tax Policy and Irreversible Investment
The authors examine the impact of tax policy uncertainty on the irreversible investment decisions of a monopolistically competitive firm. They also examine changes in the average levels of investment and its variability over short- and long-run horizons, considering a general 3-state process, a log-normal process, and a Poisson process.
Link
http://www.st-andrews.ac.uk/economics/CDMA/papers/wp0404.pdf