Dynamics in the Underground: Thought and Methodology in the Study of Investment Cycles.

Many quantitative studies have shown a stylised fact that fluctuations in business fixed investment dominate the business cycle pattern. The dynamics of the investment process have historically been seen as important elements of capital formation and economic progress. Why is it then that serious attempts to link these two aspects through rigourous theoretical models have remained in the underground of the economics discipline? This paper addresses this question.