We investigate how adverse selection in the used capital market generates procyclical sales of used capital -- capital reallocation. In our model, adverse selection produces a resale discount for used capital. In equilibrium, this endogenous partial irreversibility is more severe in recessions...

This paper presents an approach for assessing the time taken by the well known reverse-shooting and forward-shooting algorithms to solve large-scale macroeconomic models characterized by saddle-path instability. We focus on a range of investment models with multi-dimensional specifications of...

There are several studies that show the importance of intangible assets in the value of a company. Nevertheless, there are few that consider the influence of their existence on tangible assets. This paper attempts to demonstrate how the existence of the intangible assets of a company affects its...

Information technologies (IT) architecture and infrastructure is a significant cost item, especially for enterprises with complex production infrastructure and equipment that require automated and digital devices to collect and process primary data on technological and production processes. Most...

This paper investigates the properties of dynamic solutions that have been derived using the well-known reverse-shooting algorithm. Given an arbitrary large-scale model about which we have limited information, how successful is the algorithm likely to be in solving this model? We address this...

The aim of this paper is to study the determinants of investment on material and immaterial assets of Spanish firms considering they are heterogeneous assets. With this objective, we propose an investment model based on both prospective models and Tobin’s q. The developed model is then applied...