We study how tax policies that lower the cost of capital impact investment and labor demand. Difference …-in-differences estimates using confidential Census Data on manufacturing establishments show that tax policies increased both investment and … complementary inputs in modern manufacturing. Our results show that tax policies that incentivize capital investment do not lead …

and investment outcomes …

to vary with the state of the economy, generating cyclicality in investment and debt in an environment where the first … best capital stock is a constant. The government's lack of commitment induces a negative correlation between investment and … improving and cannot affect the long-run level of investment. Further, restricting the government to a balanced budget can …

to invest in telecommunications. Results indicate that the irreversibility premium raises the opportunity cost of capital …-2002. Irreversibility creates a distinction between observed and adjusted TFP growth. Observed growth, which omits the premium, annually …

Investment decisions require trading off current expenditures against future revenues. If revenues extend far enough … into the future, the executives responsible for designing long-run investment policy may no longer be in office by the time … investments during their last years in office. In our empirical work, however, we find that investment expenditures on research …