Investment, finance and the business cycle: Evidence from the Dutch manufacturing sector
In this paper we analyse the impact of profits on investment using data of the Dutch manufacturing sector in a simple Kaleckian investment model. Profits and capacity determine the level of investment. The empirical analysis with this "non-mainstream" model confirms conclusions drawn in the context of financial accelerator models. The impact of profits on investment is countercyclical. Apparently, entrepreneurs primarily use public capital markets as a source of funds in booming periods.
|Date of creation:||Apr 1995|
|Date of revision:|
|Publication status:||published in the Cambridge Journal of Economics.|
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