We consider a dynamic multifactor model of investment with financing imperfections, adjustment costs and fixed and …’ investment opportunities is very noisy. In addition, the test is well specified in the presence of both concave and convex …

cyclical behavior of aggregate fixed investment, variable capital investment, and output in the presence of persistent … fixed capital investment is reinforced by the financing constraint. Second, the effect of the financing constraint on … variable capital investment is reinforced by the irreversibility constraint. Finally, the interaction between the two …

We analyze recent contributions to growth theory based on the model of expanding variety of Romer (1990). In the first …

This paper studies the macroeconomic implications of firms' investment composition choices in the presence of credit …-run dampening of the effects of the shock, at the expense of lower long-term investment and future output, relative to an economy … financing frictions generate large and long-lasting effects on output through their impact on the composition of investment. A …

This paper presents a new framework for studying irreversible (dis)investment when a market follows a random number of … permanent decline by observing that no further growth phase arrives. We show that the existence of regime shifts in fluctuating … optimal (dis)investment policies, absent in the real options literature. The paper also shows that, despite the stochastic …