Bachmann, Ruediger; Engel, Eduardo M. R. A.; Caballero, … - 2006
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 … shock. Conversely, a slowdown after a boom can lead to a long lasting investment slump, which is unresponsive to policy …
