Abstract
What is the proper framework for an econometric investigation of investment in fixed capital? The answer depends upon which investment phenomena one wishes to analyze. Our interests are in the expectational aspects of investment--in the questions of how businessmen forecast, how plans are drawn based on forecasts, and how plans are modified as expectations change. Despite the importance of these expectational phenomena (the phrase “animal spirits” might be invoked here), the conventional capital stock adjustment model of investment (typified by JORGENSON [1971]) downgrades them in favor of other factors. The fact that considerable expectational (ex ante) data exist for the U.S. manufacturing sector makes it possible to rectify the relative neglect of these phenomena.
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References
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© 1978 Springer-Verlag Berlin Heidelberg
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Hart, A.G., Albrecht, J.W. (1978). Some Uses of the Capacity Concept in Understanding Investment Behavior. In: Strigel, W.H. (eds) Problems and Instruments of Business Cycle Analysis. Lecture Notes in Economics and Mathematical Systems, vol 154. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-47465-1_12
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DOI: https://doi.org/10.1007/978-3-642-47465-1_12
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