Most of the empirical work on investment is based on the existence of a relation between investment and the expected … demand and technology and examine its relation to investment.We find that variations in this present value series are … value series, although significantly related to investment, still leaves unexplained a large, serially correlated fraction …

, does not allow separation of the savings decisions of agents from the investment decisions of firms. Investment is … essentially passive: the "one good" assumption leads to a perfectly elastic investment supply; the absence of installation costs … for investment leads to a perfectly elastic investment demand. On the other hand, the standard model of temporary …

increases in government spending have a strong negative effect on investment spending …