The sensitivity of US aggregate investment to shocks is procyclical.
The response upon impact increases by approximately 50 percent
from the trough to the peak of the business cycle. This feature of
the data follows naturally from a DSGE model with lumpy microeconomic
capital adjustment. Beyond explaining this specific time
variation, our model and evidence provide a counterexample to the
claim that microeconomic investment lumpiness is inconsequential
for macroeconomic analysis.
"Aggregate Implications of Lumpy Investment: New Evidence and a DSGE Model."
American Economic Journal: Macroeconomics,
General Aggregative Models: Neoclassical
Capital; Investment; Capacity
Business Fluctuations; Cycles