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Lumpiness, capital adjustment costs and investment dynamics

  • Fiori, Giuseppe

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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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
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505566

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