IDEAS home Printed from https://ideas.repec.org/a/mes/postke/v37y2014i2p357-365.html
   My bibliography  Save this article

Asymmetries in the relation between investment and output

Author

Listed:
  • Hamid Baghestani
  • Tracy Mott

Abstract

This paper seeks to explore how the relation of business fixed investment and gross domestic product (GDP) experiences “accelerator” and “multiplier” feedbacks. On the basis of error-correction model estimates, we find that in different regions of economic performance these relationships vary in an asymmetric fashion. When the economy is operating below its estimated potential, we find that the accelerator mechanism is the main linkage, as investment responds to changes in GDP. As we get to the estimated existing limit of potential output, the investment multiplier starts to become the driver of output, as “animal spirits” seem to free investment from being bound by current output levels.

Suggested Citation

  • Hamid Baghestani & Tracy Mott, 2014. "Asymmetries in the relation between investment and output," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 37(2), pages 357-365, December.
    • Handle: RePEc:mes:postke:v:37:y:2014:i:2:p:357-365
    DOI: 10.2753/PKE0160-3477370208
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.2753/PKE0160-3477370208
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.2753/PKE0160-3477370208?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    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:mes:postke:v:37:y:2014:i:2:p:357-365. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/MPKE20 .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.