Financing constraints, irreversibility, and investment dynamics

• 成果类型: Article; Proceedings Paper
• 署名作者: Caggese, Andrea
• 署名单位: Pompeu Fabra University
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2006.10.001
• 发表日期: 2007
• 页码: 2102-2130
• 关键词: financing constraints; irreversibility; INVESTMENT

摘要

We develop a model of an industry with many heterogeneous firms that face both financing constraints and irreversibility constraints. We use this model to examine the cyclical behavior of aggregate fixed investment, variable capital in vestment, and output in the presence of persistent idiosyncratic and aggregate shocks. Our model yields three main results. First, the effect of the irreversibility constraint on fixed capital investment is reinforced by the financing constraint. Second, the effect of the financing constraint on variable capital investment is reinforced by the irreversibility constraint. Finally, the interaction between the two constraints is key for explaining why input inventories and material deliveries of US manufacturing firms are so volatile and procyclical, and also why they are highly asymmetrical over the business cycle. (c) 2006 Elsevier B.V. All rights reserved.