Comparing Jorgenson’s model and accelerator theory: evidence from the UK
A number of models of investment have been presented in the previous chapters including the neo-classical, accelerator and q theories and Post Keynesian analyses of investment. So far, the econometric results from the application of orthodox models to real-world data has revealed a wide range of results although there is empirical agreement about a negative correlation between aggregate investment and measures of uncertainty. The aims of this chapter are first to provide a further test of the different approaches to investment analysis, focusing in particular on the estimation of accelerator and neo-classical models and second, to illustrate how basic econometric techniques can be used to test competing theoretical hypotheses.
KeywordsCapital Stock Capacity Utilization User Cost Accelerator Model Chapter Summary
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