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reach a ‘trigger point’ involving either broad-based investment in further growth, or shrinking back to previous levels. We …
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relationship between investment activity and financial constraints is theoretically ambivalent due to simultaneity, the link … take longer to close capacity gaps. This indicates that financial constraints do indeed play a part in the investment …
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The macroeconomic implications of firms' lumpy investment behavior are subject to ongoing research. Lumpy investment … periods, thereby reducing the frequency of investment activities. Using a dynamic stochastic general equilibrium model with … compute firms' optimal decisions on investment, utilization and labor demand. Compared to the constant utilization model, the …
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This article analyzes the strategic decisions of firms whether to establish and adhere to a cartel when they can also shape competition by investing into production capacity while being subject to unexpected demand shocks with persistence. The model shows that a negative demand shock can...
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Following a positive shock, financing constraints will prolong or impede economic expansion that would have been optimal in an unconstrained environment. The study of dynamic adjustment therefore offers a direct way of verifying the presence of financing constraints and assessing their...
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