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/lp/american-economic-association/aggregate-implications-of-lumpy-investment-new-evidence-and-a-dsge-qO1vP0oqhF
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- Publisher
- American Economic Association
- Copyright
- Copyright © 2013 by the American Economic Association
- Subject
- Articles
- ISSN
- 1945-7715
- eISSN
- 1945-7715
- DOI
- 10.1257/mac.5.4.29
- Publisher site
- See Article on Publisher Site
Abstract
Abstract The sensitivity of US aggregate investment to shocks is procyclical. The response upon impact increases by approximately 50 percent from the trough to the peak of the business cycle. This feature of the data follows naturally from a DSGE model with lumpy microeconomic capital adjustment. Beyond explaining this specific time variation, our model and evidence provide a counterexample to the claim that microeconomic investment lumpiness is inconsequential for macroeconomic analysis. (JEL E13, E22, E32 )
Journal
American Economic Journal: Macroeconomics – American Economic Association
Published: Oct 1, 2013