What explains the lagged investment effect?
By: Janice C. Eberly, Sergio Rebelo, Nicolas Vincent
Contributors: Rebelo, Sergio; Vincent, Nicolas; National Bureau of Economic Research
Series: NBER working paper series -- working paper 16889; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 16889.
Publisher: National Bureau of Economic Research
Published: 2011
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "The best predictor of current investment at the firm level is lagged investment.  This lagged-investment effect is empirically more important than the cash-flow and Q effects combined.  We show that the specification of investment adjustment costs proposed by Christiano, Eichenbaum and Evans (2005) predicts the presence of a lagged-investment effect and that a generalized version of their model is consistent with the behavior of firm-level data from Compustat"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 6/2/2011.

Includes bibliographical references.

Also available in print.

System requirements: Adobe Acrobat Reader.

Mode of access: World Wide Web.