Zeros and lumps in investment: Empirical evidence on irreversibilites and nonconvexities

Review of Economics and Statistics

Volumn 85, Issue 4, 2003, Pages 1021-1037

  Nilsen, Øivind Anti ^a   Schiantarelli, Fabio ^a  

^a UNIVERSITY OF BERGEN   (Norway)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 0242721133     PISSN: 00346535     EISSN: None     Source Type: Journal    
DOI: 10.1162/003465303772815907     Document Type: Review

References (35)

1. Abel, A. B., and O. J. Blanchard, "The Present Value of Profits and Cyclical Movements in Investment," Econometric 54:2 (1986), 249-273.
2. Abel, A. B., and J. C. Eberly, "A Unified Model of Investment under Uncertainty," American Economic Review 84 (1994), 1359-1384.
3. _ "Investment and q with Fixed Costs: An Empirical Analysis," Wharton School, University of Pennsylvania, mimeograph (1999).
4. Arrow, K. J., "Optimal Capital Policy with Irreversible Investment," in James N. Wolfe (Ed.), Value, Capital and Growth, Essays in Honor of Sir John Hicks (Edinburgh: Edinburgh University Press, 1968).
5. Barnett S. A., and P. Sakellaris, "Non-linear response of Firm Investment to Q: Testing a Model of Convex and Non-convex Adjustment," Journal of Monetary Economics 42:2 (1998), 261-288.
6. Bertola, G., and R. J. Caballero, "Kinked Adjustment Costs and Aggregate Dynamics," in Olivier J. Blanchard and Stanley Fisher (Eds.), National Bureau of Economic Research Macroeconomic Annual 1990 (Cambridge, MA: MIT Press, 1990).
7. _ "Irreversibility and Aggregate Investment," Review of Economic Studies 61 (1994), 223-246.
8. Caballero, R. J., "Aggregate Investment," in J. B. Taylor and M. Woodford (Eds.), Handbook of Macroeconomics (North Holland, 1999).
9. Caballero, R. J., and E. M. R. A. Engel, "Explaining Investment Dynamics in U.S. Manufacturing: A Generalized (S, s) Approach," Econometrica 67:4 (1999), 783-826.
10. Caballero, R. J., and J. V. Leahy, "Fixed Costs: The Demise of Marginal q," NBER working paper no. 5508 (1996).
11. Caballero, R. J., E. M. R. A. Engel, and J. C. Haltiwanger, "Plant Level Adjustment and Aggregate Investment Dynamics," Brookings Papers on Economic Activity 2 (1994), 1-54.
12. Cooper, R., J. Haltiwanger, and L. Power, "Machine Replacement and the Business Cycle: Lumps and Bumps," American Economic Review 89:4 (1999), 921-946.
13. Dixit, A., and R. S. Pindyck, Investment under Uncertainty (Princeton: Princeton University Press, 1994).
14. Doms, M., and T. Dunne, "Capital Adjustment Patterns in Manufacturing Plants," Review of Economic Dynamics 1 (1998), 409-429.
15. Dustmann, C., and F. Windmeijer, "Health, Wealth and Individual Effects: A Panel Data Analysis," University College mimeograph, London (1997).
16. Eberly, J. C., "International Evidence on Investment and Fundamentals," European Economic Review 41 (1997), 1055-1078.
17. Eisner, R., and R. Strotz, "Determinants of Investment Behavior," in Commission on Money and Credit (Ed.), Impacts of Monetary Policy. (Englewood Cliffs, NJ: Prentice-Hall, 1963).
18. Gelos, R. G., and A. Isgut, "Fixed Capital Adjustment: Is Latin America Different?," this REVIEW 83:4 (2001), 717-726.
19. Gilchrist, S., and C. P. Himmelberg, "Investment: Fundamentals and Finance" (pp. 223-261), in B. S. Bernanke and J. Rottemberg (Eds.), NBER Macroeconomics Annual (Cambridge, MA: MIT Press, 1998).
20. Goldfeld, S. M., and R. E. Quandt, "Techniques for Estimating Switching Regressions" (pp. 3-36), in S. M. Goldfeld and R. E. Quandt (Eds.), Studies in Non-linear Estimation (Cambridge, MA: Ballinger, 1976).
21. Goolsbee, A., and D. B. Gross, "Estimating Adjustment Costs with Data on Heterogeneous Capital Goods," National Bureau of Economic Research working paper no. 6342 (1997).
22. Halvorsen, R., R. Jenssen, and F. Foyn, "Dokumentasjon av Industristatistikkens Tidsseriedatabase," Statistics Norway mimeograph (1991).
23. Heckman, J., and B. Singer, "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica 52:2 (1984a), 271-320.
24. _ "Econometric Duration Analysis," Journal of Econometrics 24: 1-2 (1984b), 63-132.
25. Hu, X., and F. Schiantarelli, "Investment and Capital Market Imperfections: A Switching Regression Approach Using U.S. Firm Panel Data, " this REVIEW 80:3 (1998), 466-479.
26. Khan, A., and J. K. Thomas, "Nonconvex Factor Adjustments and the Business Cycle: Do Nonlinearities Matter?" Federal Reserve Bank of Philadelphia mimeograph (2000).
27. Letterie, W., and G. Pfann, "On the Identification of Nonlinearities in Equipment Investment," BIRC, Maastricht University mimeograph (2000).
28. Lucas, R. E. Jr., and E. C. Prescott, "Investment under Uncertainty," Econometrica 39:5 (1971), 659-681.
29. Meyer, B. D. "Unemployment Insurance and Unemployment Spells," Econometrica 58:4 (1990), 757-782.
30. Nickell, S. J., "On the Role of Expectations in the Pure Theory of Investment," Review of Economic Studies 41:1 (1974), 1-19.
31. _ The Investment Decisions of Firms (Cambridge, U.K.: Cambridge University Press, 1978).
32. Nilsen, Ø. A., and F. Schiantarelli, "Zeroes and Lumps in Investment: Empirical Evidence on Ireversibilities and Non-convexities," Department of Economics working paper no. 11/1998, University of Bergen (1998).
33. Rothschild, M., "On the Costs of Adjustment," The Quarterly Journal of Economics 85 (November 1971), 605-622.
34. Serven, L., "Instability, Uncertainty and Irreversible Investment: Analytical Issues and Some Lessons for Africa," Journal of African Economies 6:3, Suppl. (1997), 229-268.
35. Thomas, J., "Lumpy Investment, Partial Adjustment and the Business Cycle: A Reconciliation," GSIA working paper no. 1999-E250 (1999).