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The behavior of household and business investment over the business cycle

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  • Kausik Gangopadhyay
  • Juan Carlos Hatchondo

Abstract

This article describes the main characteristics of the cyclical behavior of household and business investment over the cycle in the United States and reviews the most prominent studies that have tried to explain the dynamics of these two investment components. We conclude that even though there have been advances in the understanding of the behavior of these two investment components, more research is needed. One important limitation of existing studies is that they either abstract from changes in the relative price of houses or they generate house price movements that are not aligned with the data.

Suggested Citation

  • Kausik Gangopadhyay & Juan Carlos Hatchondo, 2009. "The behavior of household and business investment over the business cycle," Economic Quarterly, Federal Reserve Bank of Richmond, vol. 95(Sum).
    • Handle: RePEc:fip:fedreq:y:2009:i:sum:n:v.95no.3
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    File URL: https://www.richmondfed.org/-/media/RichmondFedOrg/publications/research/economic_quarterly/2009/summer/pdf/hatchondo.pdf
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    References listed on IDEAS

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    Cited by:

    1. Accolley, Delali, 2016. "Accounting for Business Cycles in Canada: I. The Role of Supply-Side Factors," MPRA Paper 69856, University Library of Munich, Germany.
    2. Guo, Zi-Yi, 2017. "Information heterogeneity, housing dynamics and the business cycle," EconStor Preprints 168561, ZBW - Leibniz Information Centre for Economics.
    3. Guo, Zi-Yi, 2017. "Information heterogeneity, housing dynamics and the business cycle," Economics Discussion Papers 2017-17, Kiel Institute for the World Economy (IfW Kiel).

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    Keywords

    Business cycles;

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