growth, savings, investment, the real interest rate, and the shadow value of installed capital. Such an adjustment cost need … apply only to one of two complementary capital inputs with minimal factor income share. The interaction of complementary … capital inputs blurs the distinction between capital accumulation and productivity growth. …

Large banking organizations in the U.S. hold significantly more equity capital than the minimum required by bank … regulators. This capital cushion has built up during a period of unusual profitability for the banking system, leading some … observers to argue that the capital merely reflects recent profits. Others contend that the banks deliberately choose target …