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The irrelevance of adjustment costs for investment determination

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  • Michael Sumner

Abstract

The seasonal pattern of investment, and its relation with output, rule out convex adjustment costs as an explanation of the distributed lag in response of investment to its determinants.

Suggested Citation

  • Michael Sumner, 1996. "The irrelevance of adjustment costs for investment determination," Applied Economics Letters, Taylor & Francis Journals, vol. 3(2), pages 125-126.
    • Handle: RePEc:taf:apeclt:v:3:y:1996:i:2:p:125-126
    DOI: 10.1080/135048596356843
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    References listed on IDEAS

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    1. Barsky, Robert B & Miron, Jeffrey A, 1989. "The Seasonal Cycle and the Business Cycle," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 503-534, June.
    2. 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.
    3. Summer, Michael, 1992. "Fiscal policy, seasonality, and intertemporal substitution of investment spending in the UK," Journal of Public Economics, Elsevier, vol. 49(1), pages 123-134, October.
    4. Robert E. Lucas & Jr., 1967. "Adjustment Costs and the Theory of Supply," Journal of Political Economy, University of Chicago Press, vol. 75(4), pages 321-321.
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