"In aggregate models, costs that penalise changes in investment--investment adjustment costs-- have been introduced to help account for a variety of business cycle and asset market phenomena. In this paper, we evaluate empirical evidence for these types of costs using US and UK industry data. We...

U.S. carbon dioxide emissions are highly procyclical--they increase during expansions and fall during recessions. Given this empirical fact, we estimate the response of emissions to four prominent technology shocks from the business-cycle literature using structural vector autoregressive...