{
  "title": "Determinants of U.S. Business Investment",
  "publication": "IMF Working Papers, June 15, 2018",
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  "summary": "U.S. business investment has taken a serious toll during the global financial crisis and also in the recovery phase investment did not pick up as expected.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- U.S. business investment declined sharply during the global financial crisis and did not pick up as expected in the recovery phase.\n- The investment slowdown occurred despite:\n  - record corporate profits and retained earnings,\n  - highly supportive financial conditions,\n  - improved sentiment,\n  - rising equity valuations,\n  - strong labor markets.\n- The paper applies accelerator models and Bayesian Model Averaging to assess whether U.S. business investment has been unusual."
    },
    {
      "heading": "Methodology",
      "content": "- Models applied:\n  - accelerator models,\n  - Bayesian Model Averaging."
    },
    {
      "heading": "Key findings",
      "content": "- Cautious expectations of future aggregate demand growth explain most of the weakness in investment.\n- The oil and gas sector accounts for a considerable portion of the investment slump.\n- Once these factors are taken into account, the behavior of U.S. business investment in recent years has not been unusual.\n- There is very little evidence that:\n  - uncertainty held back investment, or\n  - firms’ financial measures \"crowded out\" capital expenditure."
    },
    {
      "heading": "Subjects and keywords",
      "content": "- Subject: Bank credit, Financial crises, Financial institutions, Global financial crisis of 2008-2009, Money, National accounts, Oil prices, Prices, Private investment, Stocks\n- Keywords: accelerator model, accelerator models, Bank credit, Bayesian Model Averaging, business investment, consumption deflator, equipment investment, firm, Global, Global financial crisis of 2008-2009, growth outcome, investment activity, investment gap, investment growth, Oil prices, private fixed investment, Private investment, Stocks, WP\n\n---\n\n Content in this bundle\n\n- Determinants of U.S. Business Investment, WP/18/139, June 2018\n  - Determinants of U.S. Business Investment, WP/18/139, June 2018 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Determinants of U.S. Business Investment, WP/18/139, June 2018 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2018/06/15/determinants-of-u-s-45985"
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    "Authors: Emanuel Kopp",
    "Published: June 15, 2018",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781484361504.001",
    "U.S. business investment declined sharply during the global financial crisis and did not pick up as expected in the recovery phase.",
    "The investment slowdown occurred despite:",
    "The paper applies accelerator models and Bayesian Model Averaging to assess whether U.S. business investment has been unusual.",
    "Models applied:",
    "Cautious expectations of future aggregate demand growth explain most of the weakness in investment.",
    "The oil and gas sector accounts for a considerable portion of the investment slump.",
    "Once these factors are taken into account, the behavior of U.S. business investment in recent years has not been unusual.",
    "There is very little evidence that:",
    "Subject: Bank credit, Financial crises, Financial institutions, Global financial crisis of 2008-2009, Money, National accounts, Oil prices, Prices, Private investment, Stocks",
    "Keywords: accelerator model, accelerator models, Bank credit, Bayesian Model Averaging, business investment, consumption deflator, equipment investment, firm, Global, Global financial crisis of 2008-2009, growth outcome, investment activity, investment gap, investment growth, Oil prices, private fixed investment, Private investment, Stocks, WP",
    "**Determinants of U.S. Business Investment, WP/18/139, June 2018**"
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