Showing 1 - 5 of 5
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 …
Persistent link: https://www.econbiz.de/10012474808
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 …
Persistent link: https://www.econbiz.de/10012472388
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 …
Persistent link: https://www.econbiz.de/10012472548
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 …
Persistent link: https://www.econbiz.de/10012474020
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 …
Persistent link: https://www.econbiz.de/10012475124