This paper introduces a new approach to understanding investment. The distinctive feature of our approach is that shocks to the economic fundamentals have both persistent and transitory components, and that firms must disentangle the persistent from the transitory shocks. The model generates...

Investment projects consist of activities which are interrelated by techno-logical and resource constraints. The timing of payments depends on the scheduling of the activities which is not known a priory. Hence, the decision to be made, is to find a feasible Investment schedule with maximum net...