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Comments on: “What Drives Aggregate Investment? Evidence from German Survey Data”

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  • Andrea Caggese

Abstract

The broad question that motivates this paper is: Which shocks drive aggregate fluctuations? Narrative methods have been widely used in macroeconomics to help answer it. They involve obtaining information from qualitative data sources to identify the reason and/or the quantities associated with a particular change in a variable (Ramey, 2016). Often narrative methods refer to analyzing historical sources on macroeconomic policy decisions, such as fiscal or monetary policy announcements. However, they can also relate to the information contained in micro-level qualitative data sources, such as business surveys. For example, Guiso and Parigi (1999) use survey information on the subjective probability distribution of future demand to estimate firm-level uncertainty shocks. This paper follows a similar approach, in that it uses qualitative information from business surveys, and has two novel objectives: First, to use firm-level survey information to identify the aggregate shocks driving aggregate investment in the German manufacturing sector. Second, to identify the nature of these shocks. I think we learn a lot from the results the authors obtain pursuing the first objective. The analysis related to the second objective generates results that, while they do not provide definitive answers, raise interesting questions for future research.

Suggested Citation

  • Andrea Caggese, 2019. "Comments on: “What Drives Aggregate Investment? Evidence from German Survey Data”," Working Papers 1175, Barcelona School of Economics.
    • Handle: RePEc:bge:wpaper:1175
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    References listed on IDEAS

    as
    1. Luigi Guiso & Giuseppe Parigi, 1999. "Investment and Demand Uncertainty," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 185-227.
    2. Ramey, V.A., 2016. "Macroeconomic Shocks and Their Propagation," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 71-162, Elsevier.
    3. J. B. Taylor & Harald Uhlig (ed.), 2016. "Handbook of Macroeconomics," Handbook of Macroeconomics, Elsevier, edition 1, volume 2, number 2.
    4. Matthias M M Buehlmaier & Toni M Whited, 2018. "Are Financial Constraints Priced? Evidence from Textual Analysis," The Review of Financial Studies, Society for Financial Studies, vol. 31(7), pages 2693-2728.
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    More about this item

    Keywords

    survey data; aggregate investment; Business cycles;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications

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