Abstract
What is the proper framework for an econometric investigation of investment in fixed capital? The answer depends upon which investment phenomena one wishes to analyze. Our interests are in the expectational aspects of investment--in the questions of how businessmen forecast, how plans are drawn based on forecasts, and how plans are modified as expectations change. Despite the importance of these expectational phenomena (the phrase “animal spirits” might be invoked here), the conventional capital stock adjustment model of investment (typified by JORGENSON [1971]) downgrades them in favor of other factors. The fact that considerable expectational (ex ante) data exist for the U.S. manufacturing sector makes it possible to rectify the relative neglect of these phenomena.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
CENSUS [ 1973 ]. United States Bureau of the Census, Survey of Plant Capacity 1973 Series MQ-C1(73–1.
FELDSTEIN/FOOT [ 1971 ]. M. Felstein and D. Foot, “The Other Half of Gross Investment: Replacement and Modernization Expenditures, ” Review of Economics and Statistics 53 (February 1971) pp 49–58.
HART [1976]. A. Hart, “The Multiple Futures,” in Martin Pfaff (ed), Frontiers in Social Thought: Essays in Honor of Kenneth Boulding North-Holland Publishing, 1976.
JORGENSON [1971]. D. Jorgenson, “Econometric Studies of investment Behavior: A Survey, ” Journal of Economic Literature IX (December 1971), pp 1111–1147.
KLEIN/SUMMERS [ 1966 ]. L. Klein and R. Summers, The Wharton Index of Capacity Utilization University of Pennsylvania, Wharton School of Finance and Commerce, Economics Research Unit, 1966.
MODIGLIANI [1960]. F. Modigliani, “Introduction,” in A. Hart, F. Modigliani, and G. Orcutt (eds), Quality and Economic Significance of Anticipations Data, Princeton University for the National Bureau of Economic Research, 1960.
MUSGRAVE [ 1976 ]. J. Musgrave, “Fixed Nonresidential Business and Residential Capital in the United States, 1925–75, ” Survey of Current Business (April 1976 ).
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 1978 Springer-Verlag Berlin Heidelberg
About this paper
Cite this paper
Hart, A.G., Albrecht, J.W. (1978). Some Uses of the Capacity Concept in Understanding Investment Behavior. In: Strigel, W.H. (eds) Problems and Instruments of Business Cycle Analysis. Lecture Notes in Economics and Mathematical Systems, vol 154. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-47465-1_12
Download citation
DOI: https://doi.org/10.1007/978-3-642-47465-1_12
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-08664-2
Online ISBN: 978-3-642-47465-1
eBook Packages: Springer Book Archive