Investment, finance and the business cycle: Evidence from the Dutch manufacturing sector

H vanEes*, GH Kuper, E Sterken

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

6 Citations (Scopus)

Abstract

In this paper we analyse the impact of profits on investment using data from the Dutch manufacturing sector in a simple Kaleckian investment model. Profits and capacity determine the level of investment. The empirical analysis of this 'non-mainstream' model confirms conclusions drawn in the context of financial accelerator models. The impact of profits on investment is countercyclical. Apparently, entrepreneurs use public capital markets primarily as a source of funds in booming periods.

Original languageEnglish
Pages (from-to)395-407
Number of pages13
JournalCambridge Journal of Economics
Volume21
Issue number3
Publication statusPublished - May-1997

Keywords

  • AGENCY COSTS
  • FLUCTUATIONS
  • INFORMATION

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