TY  - JOUR
AU  - Bachmann,Ruediger
AU  - Caballero,Ricardo J.
AU  - Engel,Eduardo M.R.A.
TI  - Aggregate Implications of Lumpy Investment: New Evidence and a DSGE Model
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12336
PY  - 2006
Y2  - June 2006
UR  - http://www.nber.org/papers/w12336
L1  - http://www.nber.org/papers/w12336.pdf
N1  - Author contact info:
Ruediger Bachmann
Department of Economics
University of Michigan
Lorch Hall 335 A
Ann Arbor, MI 48109-1220
Tel: +1 (734) 764-0241
E-Mail: rudib@umich.edu

Ricardo J. Caballero
MIT
Department of Economics
Room E52-373a
Cambridge, MA 02142-1347
Tel: 617/253-0489
Fax: 617/253-6915
E-Mail: caball@mit.edu

Eduardo Engel
Yale University
Department of Economics
P.O. Box 208268
New Haven, CT  06520-8268
Tel: 203/432-5595
Fax: 203/432-5779
E-Mail: eduardo.engel@yale.edu
M2  - featured in NBER digest on 2006-06-26
AB  - The sensitivity of U.S. aggregate investment to shocks is procyclical: the initial response increases by approximately 50% from the trough to the peak of the business cycle. This feature of the data follows naturally from a DSGE model with lumpy microeconomic capital adjustment. Beyond explaining this specific time variation, our model and evidence provide a counterexample to the claim that microeconomic investment lumpiness is inconsequential for macroeconomic analysis.
ER  -