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U. S. Demand For Different Types Of Imported And Domestic Investment Goods

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  • John J. HEIM

Abstract

Separate investment demand functions are developed and tested for (1) plant and equipment, (2) inventory, and (3) residential housing and compared for consistency with previous studies of total investment demand. U.S. 1960 - 2000 data are tested using 2SLS with heteroskedasticity controls. Data in first differences are used to reduce multicollinearity, non stationarity and autocorrelation. The models explain 90% of the variance in plant and equipment demand, 85% of housing demand and 67% of inventory demand. Plant, equipment and inventory investment appear driven by the accelerator effect, crowd out, depreciation, interest, and the exchange rate; residential construction by disposable income.

Suggested Citation

  • John J. HEIM, 2009. "U. S. Demand For Different Types Of Imported And Domestic Investment Goods," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 9(2).
    • Handle: RePEc:eaa:aeinde:v:9:y:2009:i:2_9
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    References listed on IDEAS

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    1. Mr. Yungsan Kim & Woon Gyu Choi, 2001. "Has Inventory Investment Been Liquidity-Constrained? Evidence From U.S. Panel Data," IMF Working Papers 2001/122, International Monetary Fund.
    2. Michael C. Lovell, 1962. "Inventory Investment," Cowles Foundation Discussion Papers 131, Cowles Foundation for Research in Economics, Yale University.
    3. Michael C. Lovell, 1964. "Determinants of Inventory Investment," NBER Chapters, in: Models of Income Determination, pages 177-231, National Bureau of Economic Research, Inc.
    4. Newey, Whitney & West, Kenneth, 2014. "A simple, positive semi-definite, heteroscedasticity and autocorrelation consistent covariance matrix," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 33(1), pages 125-132.
    5. Robert E. Carpenter & Steven M. Fazzari & Bruce C. Petersen, 1998. "Financing Constraints And Inventory Investment: A Comparative Study With High-Frequency Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 513-519, November.
    6. repec:bla:scandj:v:79:y:1977:i:3:p:312-25 is not listed on IDEAS
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    Cited by:

    1. Christopher E.S. WARBURTON, 2012. "Globalization And Structural Change In The US Manufacturing Sector, 1987-2010," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 12(1).

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