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dc.contributor.authorCOOPER, Russell
dc.contributor.authorHALTIWANGER, John
dc.contributor.authorWILLIS, Jonathan L.
dc.date.accessioned2010-04-28T08:17:14Z
dc.date.available2010-04-28T08:17:14Z
dc.date.issued2010
dc.identifier.issn1725-6704
dc.identifier.urihttps://hdl.handle.net/1814/13796
dc.description.abstractThis paper studies capital adjustment at the establishment level. Our goal is to characterize capital adjustment costs, which are important for understanding both the dynamics of aggregate investment and the impact of various policies on capital accumulation. Our estimation strategy searches for parameters that minimize ex post errors in an Euler equation. This strategy is quite common in models for which adjustment occurs in each period. Here, we extend that logic to the estimation of parameters of dynamic optimization problems in which non-convexities lead to extended periods of investment inactivity. In doing so, we create a method to take into account censored observations stemming from intermittent investment. This methodology allows us to take the structural model directly to the data, avoiding time-consuming simulationbased methods. To study the effectiveness of this methodology, we first undertake several Monte Carlo exercises using data generated by the structural model. We then estimate capital adjustment costs for U.S. manufacturing establishments in two sectors.en
dc.format.mimetypeapplication/pdf
dc.language.isoenen
dc.relation.ispartofseriesEUI ECOen
dc.relation.ispartofseries2010/21en
dc.rightsinfo:eu-repo/semantics/openAccess
dc.titleEuler-Equation Estimation for Discrete Choice Models: A Capital Accumulation Applicationen
dc.typeWorking Paperen
dc.neeo.contributorHALTIWANGER|John|aut|
dc.neeo.contributorWILLIS|Jonathan L.|aut|
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