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The Present Value of Profits and Cyclical Movements in Investment / Andrew B. Abel, Olivier J. Blanchard.
- Format:
- Book
- Author/Creator:
- Abel, Andrew B.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w1122.
- NBER working paper series no. w1122
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 1983.
- Summary:
- Most of the empirical work on investment is based on the existence of a relation between investment and the expected present val of marginal profits.Thus, in this paper we compute such a present value series, under various assumptions about demand and technology and examine its relation to investment.We find that variations in this present value series are, surprisingly,due more to variations in the cost of capital than to variations in marginal profit. We also find that the present value series, although significantly related to investment, still leaves unexplained a large, serially correlated fraction of investment.
- Notes:
- Print version record
- May 1983.
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