When investment is irreversible, theory suggests that firms will be “reluctant to invest.” This reluctance creates a … wedge between the discount rate guiding investment decisions and the standard Jorgensonian user cost (adjusted for risk). We …

Is real investment fully determined by fundamentals or is it sometimes affected by stock market misvaluation? We … introduce three new tests that: measure the reaction of investment to sales shocks for firms that may be overvalued; use Fama … misvaluation into standard investment equations to estimate the quantitative effect of misvaluation on investment. Overall, the …

Investment in network infrastructure can boost long-term economic growth in OECD countries. Moreover, infrastructure … investment can have a positive effect on growth that goes beyond the effect of the capital stock because of economies of scale … between infrastructure and economic growth. Time-series results reveal a positive impact of infrastructure investment on …

firms in making their investment decisions.We use a revealed preference approach that relies on the pattern of investment … spending – combined with investment theory – to estimate the discount rates used by managers. The standard story predicts that … firms with high stock prices and good investment opportunities should have discount rates that do not differ systematically …

model features irreversible investment, no capital markets and fixed and sunk costs to export. Several features of the … distribution of investment rates and export participation patterns observed in firm-level data are closely matched in a calibration …

away from production, tends to reduce investment and could therefore reduce economic growth. We first review the … trade – and economic growth that is due to productive investment. Growth due to external factors tends to be positively … related to conflict, whereas growth due to productive investment should be negatively related to conflict. Finally, we discuss …