output and investment …

one, Tobin's Q is informative about the firm's growth prospects. We show that investment is positively related to Tobin …, cash flow has a positive effect on investment, and this effect is larger for smaller, faster growing and more volatile … cast doubt on evidence of financing constraints based on cash flow effects on investment …

When financial markets are incomplete, shareholders will in general disagree on the optimal level of investment to be … the asset market. In the model economy analyzed here consumers face idiosyncratic labor income risk and the only asset … competitive equilibrium shareholders will unanimously agree on the optimal level of investment. As a result, in this incomplete …

We develop a model of investment with financial constraints and use it to investigate the relation between investment … correlation between q and investment. We calibrate the model and show that, thanks to this effect, the model can generate … realistic correlations between investment, q and cash flow …

effects on Tobin’s Q, net equity issuance, and real investment, consistent with the predictions of the model …