This paper revisits the canonical assumption of nonconvex capital adjustment costs in lumpy investment models as in … aggregate investment, both a sizable mean and a sizable variance are necessary. The mean governs the importance of the extensive … margin in aggregate investment dynamics, while the variance governs how sensitive the extensive margin is to changes in the …

investment behavior. New theories, better econometric procedures, and more detailed panel data sets are behind this movement … general equilibrium aspects of the investment problem also has been significant. The concept of sunk costs is at the center of … modern theories. The implications of these costs for investment go well beyond the neoclassical response to the irreversible …

The macroeconomic implications of firms' lumpy investment behavior are subject to ongoing research. Lumpy investment … periods, thereby reducing the frequency of investment activities. Using a dynamic stochastic general equilibrium model with … compute firms' optimal decisions on investment, utilization and labor demand. Compared to the constant utilization model, the …

The paper builds up a macro function of investment to capture various key determinants and explore the intricate … determination mechanism of aggregate investment. It explicates the basic trend determinant of investment, locates the cause of … investment volatility and identifies the magnifier of volatility, recognizes the sluggish force and its sluggish and …

This paper applies some lessons from recent estimation of investment models with firm-level data to the aggregate data … investment to output and other "fundamental" variables is interpreted in terms of the traditional convex-adjustment-cost model … "fundamentalist" model can account for the reduced-form effect of output on investment and the estimated capital-stock adjustment …

This paper uses the response of investment to identified structural shocks to investigate some key issues, including … the nature of adjustment costs and investment's responsiveness to user cost. In the estimation, the model parameters are … investment- and capital-stock adjustment costs are important; the size of the capital-stock adjustment costs is in line with …

, which are important for understanding both the dynamics of aggregate investment and the impact of various policies on … parameters of dynamic optimization problems in which non-convexities lead to extended periods of investment inactivity. In doing … so, we create a method to take into account censored observations stemming from intermittent investment. This methodology …

The lumpy nature of plant-level investment is generally not taken into account in the context of monetary theory (see …, e.g., Christiano et al. 2005 and Woodford 2005). We formulate a generalized (S,s) pricing and investment model which is … empirically more plausible along that dimension. Surprisingly, our main result shows that the presence of lumpy investment casts …

Macroeconomic and sector-specific shocks exert differential effects on investment in disaggregate sectoral data. The … monotonically. A calibrated model of investment with convex capital adjustment costs and rational inattention explains these … features of the data. The model matches the empirical responses of sectoral investment because learning about shocks generates …

We study the time-varying effects of Tobin's q and cash flow on investment dynamics in the USA using a vector … variation over time of the response of investment to shocks in both variables. The time-varying sensitivity of investment to a … show that, although Tobin's q and cash flow are complementary sources of information for investment decisions, their …