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Author: Russell W. Cooper Publisher: ISBN: Category : Business cycles Languages : en Pages : 68
Book Description
This paper explores cyclical fluctuations in investment due to discrete changes in the plant's stock of capital. To do so, we focus on a machine replacement problem in which a producer decides whether to replace its entire existing stock of capital with new machinery and equipment. This decision is undertaken in a stochastic, dynamic environment which allows us to characterize the relationship between lumpy investment and the state of the aggregate economy. Our theoretical results are supplemented by numerical and empirical analyses of the dynamics of lumpy investment at the plant level and the associated aggregate implications. The dynamics are surprisingly rich since they represent the interaction between a replacement cycle, the cross sectional distribution of the age of the capital stock and the state of the aggregate economy. The empirical analysis of these dynamics is based on plant level investment data for the Longitudinal Research Database (LRD) for the 1972-91 period. Overall, we find that the frequency of lumpy investment activity is higher during periods of high economic activity and more likely the older is the capital. These empirical results are consistent with the predictions of our theoretical model. Nonetheless, the predicted path of aggregate investment that neglects the interaction of the non-flat hazard and the cross sectional distribution of the age of the capital stock tracks actual aggregate investment quite well. However, ignoring the fluctuations in the cross sectional distribution can yield predictable nontrivial errors in forecasting changes in aggregate investment in periods following large swings in aggregate investment.
Author: Russell W. Cooper Publisher: ISBN: Category : Business cycles Languages : en Pages : 68
Book Description
This paper explores cyclical fluctuations in investment due to discrete changes in the plant's stock of capital. To do so, we focus on a machine replacement problem in which a producer decides whether to replace its entire existing stock of capital with new machinery and equipment. This decision is undertaken in a stochastic, dynamic environment which allows us to characterize the relationship between lumpy investment and the state of the aggregate economy. Our theoretical results are supplemented by numerical and empirical analyses of the dynamics of lumpy investment at the plant level and the associated aggregate implications. The dynamics are surprisingly rich since they represent the interaction between a replacement cycle, the cross sectional distribution of the age of the capital stock and the state of the aggregate economy. The empirical analysis of these dynamics is based on plant level investment data for the Longitudinal Research Database (LRD) for the 1972-91 period. Overall, we find that the frequency of lumpy investment activity is higher during periods of high economic activity and more likely the older is the capital. These empirical results are consistent with the predictions of our theoretical model. Nonetheless, the predicted path of aggregate investment that neglects the interaction of the non-flat hazard and the cross sectional distribution of the age of the capital stock tracks actual aggregate investment quite well. However, ignoring the fluctuations in the cross sectional distribution can yield predictable nontrivial errors in forecasting changes in aggregate investment in periods following large swings in aggregate investment.
Author: Howard J. Sherman Publisher: Princeton University Press ISBN: 1400862043 Category : Business & Economics Languages : en Pages : 469
Book Description
Are the recurring recessions of the capitalist world merely short-term adjustments to changing economic circumstances in a system that tends, in general, toward equilibrium? In this accessible study of the business cycle, Howard Sherman makes a powerful case that recessions and painful involuntary unemployment are endogenous to capitalism. Drawing especially on the work of Wesley Clair Mitchell, Karl Marx, and John M. Keynes, Sherman explains why the nature of the business cycle produces serious economic loss and misery during its contraction phase, just as it produces growth in its expansion phase. Originally published in 1991. The Princeton Legacy Library uses the latest print-on-demand technology to again make available previously out-of-print books from the distinguished backlist of Princeton University Press. These editions preserve the original texts of these important books while presenting them in durable paperback and hardcover editions. The goal of the Princeton Legacy Library is to vastly increase access to the rich scholarly heritage found in the thousands of books published by Princeton University Press since its founding in 1905.
Author: Thomas F. Cooley Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
We construct a vintage capital model of economic growth in which the decision to replace old technologies with new ones is modeled explicitly. Depreciation in this environment is an economic, not a physical concept. We describe the balanced growth paths and the transitional dynamics of this economy. We illustrate the importance of vintage capital by analyzing the response of the economy to fiscal policies designed to stimulate investment in new technologies. A revised version of this paper is published in the Journal of Monetary Economics, v. 40, no. 3(December 1997):457-499.
Author: Mauro Boianovsky Publisher: Taylor & Francis ISBN: 104024565X Category : Business & Economics Languages : en Pages : 356
Book Description
In the mid-nineteenth century the business cycle was increasingly recognised as a recurrent phenomenon. This edition contains key texts from the range of literature in the field.
Author: Harald Hagemann Publisher: Taylor & Francis ISBN: 1040239277 Category : Business & Economics Languages : en Pages : 350
Book Description
These volumes contain key texts from the period 1860-1939 on Business Cycle Theory. It covers a long list of Anglo-Saxon writers, as well as the most important contributions from the French, German, Italian, Russian and Swedish debates. The older business cycle theories presented here richly elucidate the complex interaction between real, monetary and structural change factors in economic systems — the close association between historical and analytical methods providing a fertile source of inspiration for current researchers in the field. In Volume I of this edition, a number of chapters from early classics are presented. After 1860, the idea of a regular business cycle, formulated by Clément Juglar, was increasingly recognised as a recurrent phenomenon. This edition begins with Juglar’s analysis of crises from a monetary standpoint and John Stuart Mill’s analysis of the role of an excessive credit expansion as a characteristic and fuel for speculation. Also included are two key chapters of Marx’s work: his growth model as it is specified in the extended schemes of reproduction and his comments on crisis theory. The final sections present key chapters by Jevons on his theory of sun-spots; Hobson and Mummery’s linking of depressions in trade with insufficient consumption and excessive thrift; Marshall on price fluctuations on as the prevailing endogenous characteristic of cyclical fluctuations and his belief in the existence of a ten year cycle; Mitchell’s analysis of the imbalance between costs and prices that develops over the cycle; Kitchin’s distinction between movements of economic variables composed of either major or trade cycles and minor cycles averaging 40 months; and Kuznets attempt to give a rationale to the secondary secular movements he discovered.
Author: Timothy J. Kehoe Publisher: Cambridge University Press ISBN: 1139443720 Category : Business & Economics Languages : en Pages : 452
Book Description
This 2005 volume brings together twelve papers by many of the most prominent applied general equilibrium modelers honoring Herbert Scarf, the father of equilibrium computation in economics. It deals with developments in applied general equilibrium, a field which has broadened greatly since the 1980s. The contributors discuss some traditional as well as some modern topics in the field, including non-convexities in economy-wide models, tax policy, developmental modeling and energy modeling. The book also covers a range of distinct approaches, conceptual issues and computational algorithms, such as calibration and areas of application such as macroeconomics of real business cycles and finance. An introductory chapter written by the editors maps out issues and scenarios for the future evolution of applied general equilibrium.
Author: Sumru G. Altug Publisher: World Scientific ISBN: 9812832785 Category : Business & Economics Languages : en Pages : 161
Book Description
This title provides an overview of the modern theory and empirics of business cycles. The book examines the notion of a business cycle and discusses alternative approaches to modelling. It also discusses what lies ahead for modern business cycle theory.
Author: Mr.Sonali Das Publisher: International Monetary Fund ISBN: 1484302648 Category : Business & Economics Languages : en Pages : 32
Book Description
This paper studies private investment in India against the backdrop of a significant investment decline over the past decade. We analyze the potential causes of weaker investment at the firm level, using both firm-level financial statements and a novel dataset on firms’ investment project decisions, and find that financial frictions have played a role in the slowdown. Firms with higher financial leverage invest less, as do firms with lower earnings relative to their interest expenses. Consistent with the notion of credit constraints leading to pro-cyclical investment, we also find that firms with higher leverage are (i) less likely to undertake new investment projects, (ii) less likely to complete investment projects once begun, and (iii) undertake shorter-term investment projects.
Author: Russell W. Cooper
Author: Russell W. Cooper
Author: Russell W. Cooper
Author: Howard J. Sherman
Author: Thomas F. Cooley
Author: Mauro Boianovsky
Author: 
Author: Harald Hagemann
Author: Timothy J. Kehoe
Author: Sumru G. Altug
Author: Mr.Sonali Das