Business Fixed Investment and the Recent Business Cycle in Japan
Working Paper 5546
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