EconPapers    
Economics at your fingertips  
 

INVESTMENT SPIKES: NEW FACTS AND A GENERAL EQUILIBRIUM EXPLORATION

Francois Gourio and Anil Kashyap

No WP2007-006, Boston University - Department of Economics - Working Papers Series from Boston University - Department of Economics

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.

Keywords: adjustment costs; investment; investment tax credit; fixed costs; extensive margin. (search for similar items in EconPapers)
JEL-codes: E22 E23 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2007-05
New Economics Papers: this item is included in nep-dge, nep-fmk and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (126)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Investment spikes: New facts and a general equilibrium exploration (2007) Downloads
Working Paper: Investment Spikes: New Facts and a General Equilibrium Exploration (2007) Downloads
Working Paper: Investment Spikes: New Facts and a General Equilibrium Exploration (2007) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bos:wpaper:wp2007-006

Access Statistics for this paper

More papers in Boston University - Department of Economics - Working Papers Series from Boston University - Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Program Coordinator ().

 
Page updated 2024-07-14
Handle: RePEc:bos:wpaper:wp2007-006