@techreport{NBERw16889,
 title = "What Explains the Lagged Investment Effect?",
 author = "Janice C. Eberly and Sergio Rebelo and Nicolas Vincent",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "16889",
 year = "2011",
 month = "March",
 URL = "http://www.nber.org/papers/w16889",
 abstract = {The best predictor of current investment at the firm level is lagged investment. This lagged-investment effect is empirically more important than the cash-flow and Q effects combined. We show that the specification of investment adjustment costs proposed by Christiano, Eichenbaum and Evans (2005) predicts the presence of a lagged-investment effect and that a generalized version of their model is consistent with the behavior of firm-level data from Compustat.},
}