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Lumpiness, capital adjustment costs and investment dynamics

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  • Fiori, Giuseppe

Abstract

Aggregate investment in the US economy displays a hump-shaped pattern in response to shocks, and the autocorrelation of aggregate investment growth is positive for the first few quarters, turning negative for the later quarters. This paper shows that this feature of the data is the natural outcome of a two-sector consumption/investment model designed and calibrated to reproduce plant-level evidence on capital accumulation.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Monetary Economics.

Volume (Year): 59 (2012)
Issue (Month): 4 ()
Pages: 381-392

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Handle: RePEc:eee:moneco:v:59:y:2012:i:4:p:381-392

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Web page: http://www.elsevier.com/locate/inca/505566

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Cited by:
  1. Verona, Fabio, 2012. "Lumpy investment in sticky information general equilibrium," IMFS Working Paper Series 55, Institute for Monetary and Financial Stability (IMFS), Goethe University Frankfurt.
  2. Reiter, Michael & Sveen, Tommy & Weinke, Lutz, 2013. "Lumpy investment and the monetary transmission mechanism," Journal of Monetary Economics, Elsevier, vol. 60(7), pages 821-834.

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