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.
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| Date of creation: | Apr 1995 |
| Date of revision: | |
| Publication status: | published in the Cambridge Journal of Economics. |
| Handle: | RePEc:wop:ccsowp:0023 |
| Contact details of provider: | Postal: PO Box 800, 9700 AV Groningen Phone: 31 50 363 3749 Fax: 31 50 363 3720 Web page: http://www.rug.nl/research/som-ri/ Email: More information through EDIRC
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