The theoretical literature on business cycles predicts a positive investment response to productivity improvements, a … prediction we question from theoretical and empirical perspectives. We show that a short-term negative response of investment to …-term, contractionary effects on investment. Although this result can be obtained from both firm-specific and rental capital models, only in …

Various papers have identified shocks to investment as major drivers of output, investment, hours, and interest rates …. These investment shocks have been linked to financial frictions because financial markets are instrumental in transforming … consumption goods into installed capital. However, the importance of investment shocks is not robust once we explicitly account …

This paper studies the effects of changes in uncertainty on optimal leverage and investment in a dynamic firm … the larger shocks. Initially deleveraging leads to a drop in investment. Investment recovers as entrepreneurs build up net … optimal leverage and investment dynamics. Financial innovation amplifies the effects of uncertainty shocks …

bubble in a category of private fixed investment: commercial real estate (1990-91), internet equipment (2001), and housing … (2008-09). No previous recessions coincided with similar reallocations of investment spending. The paper provides evidence … of the unique pattern of investment spending during the last three business cycles, and discusses how the collapse of …

We study the performance of investments made at different points of an investment cycle. We use a large data set …

) housing investment is about five times as volatile as output and (ii) housing investment tends to be more volatile in … investment volatility in the UK economy …

We present an analytically tractable general equilibrium business cycle model that features micro-level investment … fixed cost distribution, under which lumpy investment can be important: (i) The steady-state elasticity of the adjustment …

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 …

investment gap. The divergence in investment paths between cash-rich and cash-poor firms is particularly large for financially …

Is monetary policy less effective at stimulating investment during periods of elevated volatility (when all firms … elevated volatility leads to a decrease in extensive margin investment incentive so that nominal stimulus generates less … aggregate investment. To do this, I first document empirically that high volatility weakens firms' investment responses to …