Non-Convexities, Asymmetries and Aggregate Investment Activity: Evidence for the UK

This paper documents cydical asymmetries in the aggregate activity of Uk industrial and commerical companies. It then investigates teh ability of a model of aggregate activity based on heterogenous actions under coc-convex adjustment at the individual level to account for thsi feature. Aggregate activity is found to be consistent with non-convex adjustment at the individual level. Asymmetric features of micreconomic adjustment technology do not appear crucial to understanding aggregate nonlinearities.