We analyze the role of endogenous capital-embodied innovation in macroeconomic dynamics. We first leverage a newly … assembled dataset to show that the quality of new capital goods is procyclical because new-product introduction by capital …-goods producers drops during recessions. We then develop a model of lumpy investment with heterogeneous firms and endogenous …

This paper empirically studies the role of fiscal constraints for disaster vulnerability and investment decisions in a … exposures to fiscal constraints realize higher returns, use higher discount rates in investment decisions, and invest less in … tangible capital and R&D. Our findings suggest that fiscal constraints affect long-term growth through a risk-based disaster …