Aubhik Khan explains some of the things economists have learned about how investment changes over the business cycle

The popular press would lead us to believe that during the stock market boom of the 1990s just about everyone was buying and selling bonds every day. In fact, evidence shows that most households make only infrequent changes to their investment portfolios. "In The Role of Market Segmented Markets...

Is there a link between the stock market and business investment? Empirical evidence indicates that there is. A firm tends to invest more when its stock price increases, and it tends to invest less when the price falls. In “Stock Prices and Business Investment,” Yaron Leitner discusses...