This paper offers evidence of the asymmetric effect of monetary policy on economic activity. First, asymmetric adjustment is captured in three macroeconomic relationships for investment, the consumer price deflator, inventories and house prices. These relationships are then embedded in a small...

This paper uses Monte Carlo methods to investigate the effects of asymmetric adjustment on estimates of the parameters of the equilibrium relationship between a set of variables.We demonstrate that simple least squares estimates and the implicit estimates from a symmetric error correction model...

The theoretical analysis of investment under uncertainty has been revolutionized over the last decade by the importation of ideas from finance. If investment is irreversible, there is a return to waiting. So although circumstances may suggest that it is profitable to invest, there may also be an...