Investment Spikes: New Facts and a General Equilibrium Exploration

Francois Gourio () and Anil Kashyap ()

No 13157, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Using plant-level data from Chile and the U.S. we show that investment spikes are highly pro-cyclical, so much so that changes in the number of establishments undergoing investment spikes (the "extensive margin") account for the bulk of variation in aggregate investment. The number of establishments undergoing investment spikes also has independent predictive power for aggregate investment, even controlling for past investment and sales. We re-calibrate the Thomas (2002) model (that includes fixed costs of investing) so that it assigns a prominent role to extensive adjustment. The recalibrated model has different properties than the standard RBC model for some shocks.

JEL-codes: E22 E32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-dge and nep-mac
Date: 2007-06
Note: IFM EFG
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Related works:
Working Paper: INVESTMENT SPIKES: NEW FACTS AND A GENERAL EQUILIBRIUM EXPLORATION (2007)
Journal Article: Investment spikes: New facts and a general equilibrium exploration (2007)
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