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cemmap Working Papers
November 2007 CWP29/07
Article
Optimal investment policy with fixed adjustment costs and complete irreversibility
Type: cemmap Working Papers
Authors: Nicolas Roys
ISSN: 1753-9196
JEL classification: C61,D21,E2

We develop and solve analytically an investment model with fixed adjust-ment costs and complete irreversibility that reproduces observed investment dynamics at the micro-level. We impose a minimal set of restrictions on technology and uncertainty. Most of the results duplicate or generalize earlier findings that have been established either by simulations or under contrefactual assumptions.

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