probability of disaster leads to a collapse of investment and a recession, an increase in risk spreads, and a decrease in the … shocks to aggregate uncertainty, I introduce a small, time-varying risk of economic disaster in a standard real business … risk of disaster does not affect the path of macroeconomic aggregates - a "separation theorem" between macroeconomic …

To analyze business fixed investment in Japan, which has been unusually volatile in recent years, we develop and apply … a loglinear flexible accelerator model. We find that movements in business fixed investment are consistent with …

of 2007 as its only impulse - produces time series for aggregate labor usage, consumption, investment, and real GDP that … closely resemble actual U.S. time series. Despite having no explicit financial market, the model has investment fall steeply …

We propose an empirical implementation of the consumption-investment problem using the martingale representation … simplifies the investor's task of specifying the investment opportunity set and inherits the computational convenience of the … and probabilities, which generate variation in consumption, and the consumption smoothing induced by risk aversion. Using …

We develop a model of investment with financial constraints and use it to investigate the relation between investment … between q and investment, relative to the frictionless benchmark. We present a calibrated version of the model, which, due to … this effect, generates realistic correlations between investment, q, and cash flow …

rigidities: investment adjustment costs, variable capacity utilization, habit formation in consumption, and habit formation in … investment-specific shocks, and government spending shocks. Each of these shocks is buffeted by four types of structural …

The investment theory, in which the expected return varies cross-sectionally with investment, expected profitability …