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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: E22 E32 D83 (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 (6) Track citations by RSS feed

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https://www.econstor.eu/bitstream/10419/145572/1/VfS_2016_pid_6427.pdf (application/pdf)

Related works:
Working Paper: Investment under Rational Inattention: Evidence from US Sectoral Data (2020) Downloads
Working Paper: Investment under Rational Inattention: Evidence from US Sectoral Data (2019) Downloads
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