shock. Our estimated model uncovers a central role for investment in the transmission mechanism of monetary policy, as high … MPCs amplify the investment response in the data. This force also generates a procyclical response of consumption to … investment shocks, leading our model to infer a central role for these shocks as a source of business cycles. …

decoupling of household investment from the business cycle. I estimate a model of household investment, an aggregate of non … durable consumption and corporate sector investment, inflation and a short-term interest rate. Subsets of the models … large monetary policy shocks contributions to GDP components and by a high correlation of household investment to the …

effect and the investment effect in aggregate time series for Germany after the Reunification in 1990. Moreover, we discuss …