@techreport{NBERw12462,
 title = "The Bond Market's q",
 author = "Thomas Philippon",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "12462",
 year = "2006",
 month = "August",
 URL = "http://www.nber.org/papers/w12462",
 abstract = {I propose an implementation of the q-theory of investment using bond prices instead of equity prices. Credit risk makes corporate bond prices sensitive to future asset values, and q can be inferred from bond prices. The bond market's q performs much better than the usual measure in standard investment equations. With aggregate data, the fit is three times better, cash flows are driven out and the implied adjustment costs are reduced by more than an order of magnitude. The new measure also improves firm level investment equations.},
}