scholarly journals Idiosyncratic Shocks and the Role of Nonconvexities in Plant and Aggregate Investment Dynamics

2007 ◽  
Author(s):  
Aubhik Khan ◽  
Julia Thomas
Keyword(s):  
Investment Dynamics ◽  
Idiosyncratic Shocks ◽  
Aggregate Investment

scholarly journals Machine Replacement and the Business Cycle: Lumps and Bumps

1999 ◽  
Vol 89 (4) ◽  
pp. 921-946 ◽  
Author(s):  
Russell Cooper ◽  
John Haltiwanger ◽  
Laura Power
Keyword(s):  
Capital Stock ◽  
Cross Sectional ◽  
Lumpy Investment ◽  
Level Data ◽  
Investment Dynamics ◽  
Aggregate Investment ◽  
The Cross ◽  
The Business Cycle ◽  
Plant Level ◽  
Machine Replacement

This paper explores investment fluctuations due to discrete changes in a plant's capital stock. The resulting aggregate investment dynamics are surprisingly rich, reflecting the interaction between a replacement cycle, the cross-sectional distribution of the age of the capital stock, and an aggregate shock. Using plant-level data, lumpy investment is procyclical and more likely for older capital. Further, the predicted path of aggregate investment that neglects vintage effects tracks actual aggregate investment reasonably well. However, ignoring fluctuations in the cross-sectional distribution of investment vintages can yield predictable nontrivial errors in forecasting changes in aggregate investment. (JEL E22, E32)

scholarly journals A Note on the Granular Nature of Imports in German Manufacturing Industries

2014 ◽  
Vol 65 (3) ◽  
Author(s):  
Joachim Wagner
Keyword(s):  
Power Law ◽  
Manufacturing Industries ◽  
Large Firms ◽  
Idiosyncratic Shocks ◽  
First Time

AbstractThis paper uses an approach recently suggested by Gabaix (Eonometrica 2011) to investigate for the first time the role of idiosyncratic shocks to the largest firms in the dynamics of imports by firms from manufacturing industries. For Germany we find evidence that imports are power-law distributed and that the distribution of imports in the industries can be characterised as fat-tailed. Results show that idiosyncratic shocks to very large firms are important for the import dynamics in 2010/2011 but not in 2009/2010.

scholarly journals Estimating the role of money supply in determining aggregate investment in Pakistan

2018 ◽  
Vol 2 (1) ◽  
pp. 75-90
Author(s):  
Sohail Alam Khan ◽  
Muhammad Tariq ◽  
Brekhna Gul
Keyword(s):  
Money Supply ◽  
Least Squares Method ◽  
Aggregate Demand ◽  
Ordinary Least Squares ◽  
Filter Method ◽  
Causality Test ◽  
Gdp Growth Rate ◽  
Aggregate Investment ◽  
Effective Instrument

This study investigates the role of money supply in determining the Pakistan's aggregate investment for the period 1980-2015. Hodric-Prescott Filter method has been applied for extracting the trend from the data. For estimating the results ordinary least squares method, granger causality test and Vector Autoregression has been used. The results revealed that money supply (M1 and M2) increases the aggregate investment in Pakistan. Other variables such as GDP growth rate and saving also showed a positive and significant association with aggregate investment. However, foreign direct investment remained insignificant. These findings recommended that the State Bank of Pakistan can used both M1 and M2 as an effective instrument of monetary policy for increasing the level of aggregate investment component of aggregate demand in the economy.

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