• Media type: E-Book
  • Title: Striking While the Iron is Cold : Fragility after a Surge of Lumpy Investments
  • Contributor: Lee, Hanbaek [Author]
  • Published: [S.l.]: SSRN, 2023
  • Extent: 1 Online-Ressource (39 p)
  • Language: English
  • DOI: 10.2139/ssrn.4316105
  • Identifier:
  • Keywords: business cycle ; state dependence ; lumpy investment ; interest-elasticity
  • Origination:
  • Footnote: Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments November 9, 2022 erstellt
  • Description: This paper studies the endogenous state dependence of the aggregate investment dynamics stemming from synchronized lumpy investments at the firm level. I develop a heterogeneous-firm real business cycle model where the semi-elasticities of large and small firms’ investments are matched with the empirical estimates. In the model, following a negative TFP shock, the timings of large firms’ lumpy investments are persistently synchronized due to the low sensitivity to the general equilibrium effect, leading to a surge of lumpy investments. After the surge, TFP-induced recessions are especially severe, and the semi-elasticity of the aggregate investment drops significantly
  • Access State: Open Access