-2000 sample, the initial response of investment to a productivity shock with responses in the top quartile is 60% higher than the … shock. Conversely, a slowdown after a boom can lead to a long lasting investment slump, which is unresponsive to policy … smoothing in the investment response to aggregate shocks. The remaining 40% is explained by general equilibrium forces. The …

We develop a model of investment with financial constraints and use it to investigate the relation between investment … invested capital, and changes in the value of the insiders' future rents per unit of capital. This weakens the correlation … between q and investment, relative to the frictionless benchmark. We present a calibrated version of the model, which, due to …

We develop a model of investment with financial constraints and use it to investigate the relation between investment … invested capital, and changes in the value of the insiders' future rents per unit of capital. This weakens the correlation … between q and investment, relative to the frictionless benchmark. We present a calibrated version of the model, which, due to …

We develop a model of investment with financial constraints and use it to investigate the relation between investment … invested capital, and changes in the value of the insiders' future rents per unit of capital. This weakens the correlation … between q and investment, relative to the frictionless benchmark. We present a calibrated version of the model, which, due to …