Evidence of the statistical significance of profits in Q regressions remains one of the principal findings in the empirical investment literature. This result is taken to support the view that capital market imperfections are an important element for understanding investment. This paper...

Understanding the nature of financial frictions faced by firms is relevant for both monetary and fiscal policy experiments. Empirical investment studies commonly find that proxies for firms' internal funds are significant as explanatory variables, particularly in the Q-theory based regression...

We take the standard machine replacement model and introduce uncertainty about the productivity differential of new vintages made available as time passes. In particular, agents are uncertain about the quality of their match with a new vintage until they adopt it. Uncertainty allows us to...

Evidence of the statistical significance of profits in Q regressions remains one of the principal findings in the empirical investment literature. This result is taken to support the view that capital market imperfections are an important element for understanding investment. This paper...

A relatively unexplored question in dynamic labour demand regards the source of adjustment costs, whether they depend on net or gross changes in employment. We estimate a structural model of dynamic labour demand where the firm faces adjustment costs related to gross and net changes in its...

This paper considers various AK models to investigate inference about the relative price between consumption and investment using NIPA data. We find, that depending on the model used, we can legitimately generate different time series for this price. If we successfully construct a falling price...

Evidence of the statistical significance of profits in Q regressions remains one of the principal findings in the empirical investment literature. This result is frequently taken to support the view that capital market imperfections are an important element for understanding investment. This...