Bertola, Giuseppe; Caballero, Ricardo J - National Bureau of Economic Research (NBER) - 1991
Investment is often irreversible, in that installed capital has little or no value unless used in production. In the … presence of ongoing uncertainty, an individual firm's irreversible investment policy optimally alternates short bursts of … positive gross investment to periods of inaction, when the installed capital stock is allowed to depreciate. The behavior of …