A Q-theory model with lumpy investment

  title={A Q-theory model with lumpy investment},
  author={Jianjun Miao and Pengfei Wang},
We present an analytically tractable dynamic stochastic general equilibrium model that incorporates micro-level …xed and convex adjustment costs. We provide an explicit characterization of equilibrium dynamics by a system of nonlinear stochastic di¤erence equations. We provide general conditions under which our model features investment lumpiness at the… CONTINUE READING