We study the implications of increased price flexibility on aggregate output volatility in a dynamic stochastic general … flexibility ; aggregate volatility ; systematic monetary policy ; DSGE model ; Bayesian estimation …

. Lumpy adjustment arises because of inattentiveness in capital investment decisions instead of the more common assumption of … with lumpy investment yields business cycle dynamics which differ substantially from those of an otherwise identical model … with frictionless investment and are much more consistent with the empirical evidence. These results therefore strengthen …

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 …