The procyclicality of inventory investment is a central feature of US business cycles. As such, it provides a test for the recent literature on news shocks, which argues that anticipated changes in fundamentals are important sources of aggregate fluctuations. We show that, in a range of...

We document that the rise of factors such as software, intellectual property, brand, and innovative business processes, collectively known as "intangible capital" can explain much of the weakness in physical capital investment since 2000. Moreover, intangibles have distinct economic features...

This paper studies a simple static model in which a firm simultaneously chooses investment and debt composition, when debt can be issued to a financial intermediary (banks) or on public debt markets. The key distinction between the two is that, when liquidation looms, intermediated debt is...

The composition of corporate borrowing between bank loans and market debt varies substantially, both across countries and over the business cycle. This paper develops a new model of firm dynamics, where firms choose both the scale and composition of their borrowing, in order to understand the...

In recent years, US investment has been lackluster, despite rising valuations. Key explanations include growing rents and growing intangibles. We propose and estimate a framework to quantify their roles. The gap between valuations -- reflected in average Q -- and investment -- reflected in...