Investment Behavior, Observable Expectations, and Internal Funds
Kevin A. Hassett, Stephen D. Oliner, Jason G. Cummins | AEI Online
September 02, 2002

  • Download

The authors use earnings forecasts from securities analysts to construct a new measure of the neoclassical fundamentals that drive investment. They find that investment responds significantly--in both economic and statistical terms--to our new measure of fundamentals. In addition, they find that cash flow is uncorrelated with investment spending, even for firms that have been found to be “liquidity constrained” in previous studies. Taken together, the results cast doubt on the common interpretation of cash-flow effects in empirical investment equations using Brainard-Tobin average q.

Download file Revised Draft, September 1, 2002.

Download file Original Draft, March 31, 1999.

  • Download
Also Visit
AEIdeas Blog The American Magazine
About the Author

 

Kevin A.
Hassett
  • Before joining AEI, Mr. Hassett was a senior economist at the Board of Governors of the Federal Reserve System and an associate professor of economics and finance at the Graduate School of Business of Columbia University, as well as a policy consultant to the Treasury Department during the George H. W. Bush and Clinton administrations. He served as an economic adviser to the George W. Bush 2004 presidential campaign, chief economic adviser to Senator John McCain during the 2000 presidential primaries, senior economic adviser to the McCain 2008 presidential campaign, and economic adviser to the Mitt Romney 2012 presidential campaign.   Mr. Hassett is a columnist for National Review.

  • Phone: 202-862-7157
    Email: khassett@aei.org

  • Assistant Info

    Name: Emma Bennett
    Phone: 202-862-5862
    Email: emma.bennett@aei.org
Show More | See Full Profile

 

Stephen D.
Oliner

  • An economist who joined AEI after a career at the Federal Reserve Board that spanned more than 25 years, Stephen Oliner held a number of high-level positions at the Fed, most recently serving as a senior adviser in the Division of Research and Statistics. He was actively involved in the Fed's analysis of the U.S. economy and financial markets, and his research spanned a wide range of topics, including monetary policy, business capital spending, productivity growth, commercial real estate and the measurement of capital. Concurrent to his position at AEI, Mr. Oliner is a senior fellow at the UCLA Ziman Center for Real Estate. He also maintains an economic consulting practice. 

  • Phone: 202.419.5205
    Email: stephen.oliner@aei.org

  • Assistant Info

    Name: Emily Rapp
    Phone: 202.419.5212
    Email: emily.rapp@aei.org
Show More | See Full Profile

What's new on AEI

image The Fed can't save the stock market again
image Obama's IRS and AP scandals cast big chill on free speech
image Organic industry's credibility eroded by misinformation about GE foods
image It's not universal coverage
close

Join the AEI Media List

AEI's press office frequently sends press advisories highlighting the availability of scholars to discuss particular news topics, as well as recent AEI products (such as studies, articles, and testimonies). Please enter your contact information below to be added to our media list.
JOIN MEDIA LIST
AEI on Facebook
Events Calendar
  • 20
    MON
  • 21
    TUE
  • 22
    WED
  • 23
    THU
  • 24
    FRI
Tuesday, May 21, 2013 | 5:00 p.m. – 6:30 p.m.
Free beer: Liberating libations from ‘Bootleggers and Baptists’

Join us for a discussion of the history and future of federal and state alcohol regulation and competition, followed by a reception with beer, wine, and spirits.

Event Registration is Closed
Wednesday, May 22, 2013 | 5:00 p.m. – 6:30 p.m.
NCLB sanctions: Tests taken, lessons learned

Join education scholars and practitioners for a discussion about the latest NCLB research and its implications for future education policy.

VIEW EVENT DETAILS
Thursday, May 23, 2013 | 12:00 p.m. – 1:30 p.m.
Competing visions of the common good: Rethinking help for the poor

What shared commitments do we have as citizens and neighbors to care for one another? How can a proper ordering of America’s political economy enable the most people to have the best life? At this event, Rep. Frank Wolf (R-VA), a longtime champion of human rights causes, and AEI President Arthur Brooks will join Wallis in addressing these and other questions.

VIEW EVENT DETAILS
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.