We study the time-varying effects of Tobin's q and cash flow on investment dynamics in the USA using a vector … variation over time of the response of investment to shocks in both variables. The time-varying sensitivity of investment to a … show that, although Tobin's q and cash flow are complementary sources of information for investment decisions, their …

We estimate a New-Neoclassical Synthesis model of the business cycle with two investment shocks. The first, an … investment-specific technology shock, affects the transformation of consumption into investment goods and is identified with the … relative price of investment. The second shock affects the production of installed capital from investment goods or, more …

Macroeconomic and sector-specific shocks exert differential effects on investment in disaggregate sectoral data. The … monotonically. A calibrated model of investment with convex capital adjustment costs and rational inattention explains these … features of the data. The model matches the empirical responses of sectoral investment because learning about shocks generates …

Is real investment fully determined by fundamentals or is it sometimes affected by stock market misvaluation? We … introduce three new tests that: measure the reaction of investment to sales shocks for firms that may be overvalued; use Fama … misvaluation into standard investment equations to estimate the quantitative effect of misvaluation on investment. Overall, the …

stands in stark contrast to traditional VAR models, which yield decisively different results in the two identification …

stands in stark contrast to traditional VAR models, which yield decisively different results in the two identification …

Using US data for the period 1959-2007, we identify sectoral productivity shocks and capital investment-specific shocks … real and nominal factors, we find that capital investment-specific shocks explain 70 percent of fluctuations of R …&D investment while R&D technology shocks explain 30 percent of the variation of aggregate output net of R&D investment (i.e. the …