Business Fixed Investment and the Recent Business Cycle in Japan
To analyze business fixed investment in Japan, which has been unusually volatile in recent years, we develop and apply a loglinear flexible accelerator model. We find that movements in business fixed investment are consistent with movements in output and the tax- adjusted cost of capital, both on average during our entire 1961-94 sample and during the recent 1986-94 business cycle.
Business Fixed Investment and the Recent Business Cycle in Japan, Nobuhiro Kiyotaki, Kenneth D. West. in NBER Macroeconomics Annual 1996, Volume 11, Bernanke and Rotemberg. 1996