Business Fixed Investment and the Recent Business Cycle in Japan

Business Cycle Features In The Iranian Economy

Investment options and the business cycle

This paper extends Lucas (1978) to a production economy with two capital goods. It is an RBC model in which each unit of investment requires a new idea, an “option”. When options are scarce, new capital is harder to put in place and the value of old capital rises. Thus the stock market and Tobin’s Q are negative indexes of intangibles. During a boom, Q rises gradually, as options are used up. B...

Understanding Changes in Aggregate Business Fixed Investment

On average, higher levels of such investments raise production by increasing the productivity of the labor force. While the significance of shortterm changes in business investment is less widely recognized, the importance of such changes for the business cycle has been known to economists since the beginning of the last century. For example, many believe that the current record expansion has b...

Corporate Investment Over the Business Cycle

While firm-level capital growth rates exhibit positive spikes, and rise as fast as they fall, the average capital growth rate across firms exhibits negative spikes, and declines faster than it recovers. We develop a dynamic model of investment that reconciles these empirical patterns. The model features costly reversibility, cyclical macroeconomic shocks, and uncertainty about the state of the ...

Recent Changes in the US Business Cycle∗

The US business cycle expansion that started in March 1991 is the longest on record. This paper uses statistical techniques to examine whether this expansion is a onetime unique event or whether its length is a result of a change in the stability of the US economy. Bayesian methods are used to estimate a common factor model that allows for structural breaks in the dynamics of a wide range of ma...