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Investment, finance and the business cycle: Evidence from the Dutch manufacturing sector

Hans van Ees, Gerard Kuper () and Elmer Sterken ()

No 23, Working Papers from Centre for Economic Research, University of Groningen and University of Twente

Abstract: 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.

Keywords: firm profits; investment; business cycles (search for similar items in EconPapers)
JEL-codes: E12 E22 E32 (search for similar items in EconPapers)
Date: 1995-04
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Published in the Cambridge Journal of Economics.

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Related works:
Journal Article: Investment, Finance and the Business Cycle: Evidence from the Dutch Manufacturing Sector (1997)
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