Investment under Rational Inattention: Evidence from US Sectoral Data

Peter Zorn ()

VfS Annual Conference 2016 (Augsburg): Demographic Change from Verein für Socialpolitik / German Economic Association

Abstract: I document the effects of macroeconomic and sector-specific shocks on investment in disaggregate sectoral capital expenditure data. The response of sectoral investment to macroeconomics shocks is protracted and hump-shaped, just as in aggregate data. By contrast, the effects of sector-specific innovations are short-lived and monotonically decreasing. I build a model of investment with rational inattention to explain these facts. The model predicts protracted effects of aggregate shocks and short-lived effects of sector-specific shocks on sectoral investment.

JEL-codes: D83 E22 E32 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-dge and nep-mac
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Citations: View citations in EconPapers (7)

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Related works:
Working Paper: Investment under Rational Inattention: Evidence from US Sectoral Data (2020)
Working Paper: Investment under Rational Inattention: Evidence from US Sectoral Data (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc16:145572

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