-2000 sample, the initial response of investment to a productivity shock with responses in the top quartile is 60% higher than the … smoothing in the investment response to aggregate shocks. The remaining 40% is explained by general equilibrium forces. The … particular, booms feed into themselves. The longer an expansion, the larger the response of investment to an additional positive …

holds for the microeconomic response of some of the most important economic variables, such as investment, labor demand, and … actual response to shocks is less than half as fast as the estimated response. For investment, labor demand and prices, the …, even after aggregating investment across all establishments in U.S. manufacturing, the estimate of its speed of adjustment …