Non-Convexities, Asymmetries and Aggregate Investment Activity: Evidence for the UK
Abstract:This paper documents cyclical asymmetries in the aggregate investment activity of UK industrial and commercial companies. The ability of a model of aggregate activity based on heterogeneous actions under non-convex adjustment at the individual level to account for this feature is then investigated. Aggregate activity is found to be consistent with non-convex adjustment at the individual level. Asymmetric features of microeconomic adjustment technology do not appear crucial for understanding aggregate non-linearities.
Document Type: Research Article
Affiliations: University of Edinburgh
Publication date: June 1, 2000