Data and Code for: Obsolescence of Capital and Investment Spikes

Principal Investigator(s):  View help for Principal Investigator(s) Arthur Fishman, Ariel University and Bar Ilan University; Boyan Jovanovic, New York University

Version:  View help for Version V2

Name File Type Size Last Modified
  Data and code 07/21/2020 02:00:PM
README.pdf application/pdf 125 KB 07/21/2020 10:13:AM
Response.pdf application/pdf 20.1 KB 07/21/2020 10:14:AM

Project Citation: 

Fishman, Arthur, and Jovanovic, Boyan. Data and Code for: Obsolescence of Capital and Investment Spikes. Nashville, TN: American Economic Association [publisher], 2021. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2021-10-21. https://doi.org/10.3886/E119984V2

Project Description

Summary:  View help for Summary
The prospect of capital obsolescence inhibits investment. Investors thus become more optimistic when the obsolescence of their capital slows down. We propose a model with no fixed costs of investment, and random technological progress that induces obsolescence of capital in place. Spikes occur precisely when technological progress slows down. Moreover, the more variable the progress, the larger are the spikes. Cross-industry data show that where price of capital declines are more variable, investment spikes are larger.

Scope of Project

Subject Terms:  View help for Subject Terms investments
JEL Classification:  View help for JEL Classification
      D25 Intertemporal Firm Choice: Investment, Capacity, and Financing
      E22 Investment; Capital; Intangible Capital; Capacity
Geographic Coverage:  View help for Geographic Coverage US Industries
Time Period(s):  View help for Time Period(s) 1947 – 1999


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Published Versions

V2 [2021-10-21]

V1 [2020-06-19]

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