## Fixed Capital Adjustment: Is Latin America Different? Evidence from the Colombian and Mexican Manufacturing Sectors

_IMF Working Papers, April 1, 1999_

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## Bibliographic details
- Authors: Alberto Isgut
- Published: April 1, 1999
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451847925.001

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### Overview and Objective
- Examines capital adjustment patterns using two large and largely novel data sets from the manufacturing sectors of Colombia and Mexico.
- Compares investment patterns in these countries to those reported for the United States.

### Key Findings
- Investment patterns in Colombia and Mexico resemble those reported for the United States "to a surprising extent."
- Capital adjustments beyond maintenance investment occur only rarely.
- Large spikes account for a significant fraction of total investment.
- Duration models do not provide strong evidence for the presence of substantial fixed costs.
- Nonparametric adjustment function estimates reveal the presence of irreversibilities in investment.
- These irreversibilities are important for understanding aggregate investment behavior.

### Methodology and Technical Terms
- Data: Two large and largely novel manufacturing-sector datasets from Colombia and Mexico.
- Analytical approaches mentioned:
  - Duration models
  - Nonparametric adjustment function estimates
  - Logit models (listed among subjects/keywords)
- Relevant technical terms and concepts preserved exactly as used in the source:
  - capital stock
  - equipment investment
  - hazard function
  - investment episode
  - investment rate
  - investment spike
  - irreversibilities
  - lumpiness
  - nonconvexities
  - panel data
  - Producer price indexes
  - Productivity
  - Stocks

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/30/fixed-capital-adjustment-is-latin-america-different-evidence-from-the-colombian-and-mexican-2999_