In this paper we derive a model of aggregate investment that builds from the lumpy microeconomic behavior of firms … aggregate investment obtained from adding up the actions of firms subject to aggregate and idiosyncratic shocks, is highly non … postwar sectoral U.S. manufacturing equipment and structures investment. For a given sequence of aggregate shocks, the …

This paper evaluates evidence of the impact of outbound foreign direct investment (FDI) on domestic investment rates …. OECD countries with high rates of outbound FDI in the 1980s and 1990s exhibited lower domestic investment than other … countries, which suggests that FDI and domestic investment are substitutes. U.S. time series data tell a very different story …

The sensitivity of U.S. aggregate investment to shocks is procyclical: the initial response increases by approximately … counterexample to the claim that microeconomic investment lumpiness is inconsequential for macroeconomic analysis …

The 90s have witnessed a revival in economists' interest and hope of explaining" aggregate and microeconomic investment … of the investment problem also has been significant. " The concept of sunk costs is at the center of modern theories. The … implications of these costs for" investment go well beyond the neoclassical response to the irreversible-technological friction …

This paper examines the investment effects of tax subsidies for which some assets and not others are eligible …. Distortionary tax subsidies encourage firms to concentrate investments in tax-favored assets profitability of investment and …, which in turn discourages investment. Borrowing rates react so strongly that aggregate investment may rise very little, or …

The taxation of corporate assets is well understood to influence investment and firm valuation. This paper explores the … incentives than those implied by the usual static analysis. Simulation results suggest that investment is sensitive to future tax …

In this paper we derive a model of aggregate investment that builds from the lumpy microeconomic behavior of firms …-of-sample criteria, we find that the model performs substantially better than the standard linear models of investment for postwar … sectoral U.S. manufacturing equipment and structures investment data …

Investment is often irreversible, in that installed capital has little or no value unless used in production. In the … presence of ongoing uncertainty, an individual firm's irreversible investment policy optimally alternates short bursts of … positive gross investment to periods of inaction, when the installed capital stock is allowed to depreciate. The behavior of …

We study the effects of aggregate and idiosyncratic uncertainty on the entry of firms, total investment, and prices in … a competitive industry with irreversible investment. We first use standard dynamic programming methods to determine …