the investment rate depends mostly on future returns. -- gross investment ; gross hiring ; frictions ; business cycles …The decisions of firms on investment and hiring play a crucial role in business cycle fluctuations. This paper explores ….S. data, it shows that the model with frictions is able to fit the data. A key element is the interaction of hiring and …

We document the empirical fact that asset prices in the consumption-goods and investment-goods sector behave almost … identically in the US economy. In order to derive the cyclical behavior of the equity returns in these two sectors, we consider a … empirical fact that equity returns in the two sectors are not correlated with output. …