№1 (30) / 2026 Full issue

Release Date 27.02.2026

 ECONOMIC THEORY

 

 

 

Komarovskaia Natalya

Senior Lecturer in the Department of Economics

Moscow State Institute of International Relations (University) of the Ministry of Foreign Affairs of Russia (Moscow), This email address is being protected from spambots. You need JavaScript enabled to view it.

https://orcid.org/0000-0002-9213-2320

 

UNCERTAINTY AND ECONOMIC ACTIVITY: THEORETICAL ASPECTS

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This paper examines the mechanisms by which uncertainty influences economic activity. It describes the channels through which uncertainty exerts both a negative influence – the real options effect, the financial channel, and reduced consumer spending – and a positive influence—growth options and the Oi-Hartman-Abel effect. Aspects of the real options mechanism, such as companies' wait-and-see behavior and the sunk costs associated with real investment and hiring, necessitate adjustments to the traditional approach to evaluating investment projects. In addition to the negative impact of uncertainty on investment, hiring, and employment, the real options channel can lead to a lower sensitivity of economic agents to changes in the economic environment, and, consequently, to lower economic policy effectiveness. The financial channel of uncertainty is associated with financial frictions and increased financing costs due to an increase in the risk premium, which amplify the real impact of uncertainty shocks. This amplifying effect can be quantified using the financial uncertainty multiplier. A decline in consumer spending has a negative impact on aggregate demand in the short term and, if prices and interest rates are insufficiently flexible, may lead to a decline in aggregate output. On the other hand, according to the growth options mechanism, high uncertainty can stimulate increased investment, particularly in technology- and capital-intensive companies, since uncertainty increases the size of potential gains. Also, under the Oi-Hartman-Abel effect, in the case of a firm's profit being convexly dependent on demand or costs, an increase in uncertainty regarding these variables can lead to an increase in expected benefits, which creates incentives for expansionary behavior. The main difficulty in the interaction between the negative and positive effects of uncertainty is determining the significance of each individual transmission mechanism. A review of studies determining the prevailing effect is provided, the majority of which confirm the negative aggregate impact of uncertainty shocks.

Keywords: uncertainty, real options, financial frictions, growth options, Oi-Hartman-Abel effect

JEL: D80, D81, E32

UDC: 338.12.015

DOI: 10.52342/2587-7666VTE_2026_1_22_38

 

©  N. Komarovskaia, 2026

© Institute of Economics of the Russian Academy of Sciences «Issues of Theoretical Economics», 2026

 

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Manuscript submission date: 11.11.2025

Manuscript acceptance date: 09.12.2025

 

For citation:

Komarovskaia N. Uncertainty and Economic Activity: Theoretical Aspects // Voprosy teoreticheskoy ekonomiki. 2026. No. 1. Pp. DOI: 10.52342/2587-7666VTE_2026_1_22_38