IDEAS home Printed from
   My bibliography  Save this article

Investment Spending in Australia: Further Study and Interpretation


  • Heijdra, Ben J
  • Scarth, William M


Recent work in macro theory suggests that aggregate "demand" policies have direct supply-side effects in the short run, if Robert E. Lucas's standard specification of the nonlinear adjustment costs for capital is generalized. In this paper, the authors estimate an investment equation (involving James Tobin's valuation ratio and Australian data) which nests three hypotheses: Lucas's standard specification of adjustment costs, a simple generalization which permits labor to be involved in the installation of capital, and a model which allows for liquidity constraints. The results support the suggested alternative formulation of the q-theory. Copyright 1990 by The Economic Society of Australia.

Suggested Citation

  • Heijdra, Ben J & Scarth, William M, 1990. "Investment Spending in Australia: Further Study and Interpretation," The Economic Record, The Economic Society of Australia, vol. 66(195), pages 295-307, December.
  • Handle: RePEc:bla:ecorec:v:66:y:1990:i:195:p:295-307

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Myatt, Anthony & Scarth, William M., 1995. "Can fiscal spending be contractionary when interest rates have supply-side effects?," Journal of Macroeconomics, Elsevier, vol. 17(2), pages 289-301.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ecorec:v:66:y:1990:i:195:p:295-307. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley Content Delivery). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.