Because adjustment costs may make infrequent corrections preferable to partial continuous
adjustment, microeconomic units often behave quite differently from representative agents in …

Fix a domain\mathcal S ⊂ R^ k (our solvency region) and let Y (t)= Y^(u)(t) be a stochastic
process of the form d Y (t) &= b (Y (t), u (t)) d t+ σ (Y (t), u (t)) d B (t)\nonumber\&\quad+ ∫ …

Two homogeneous stocks of physical capital are located in two different countries,
separated by an “ocean.” They are consumed by local residents, invested in a random …

In this paper we derive a model of aggregate investment that builds from the lumpy
microeconomic behavior of firms facing stochastic fixed adjustment costs. Instead of the …

This book aims to widen the understanding of stochastic dynamic choice and equilibrium
models. It offers a simplified and heuristic exposition of the theory of Brownian motion and its …

Most manufacturing systems are large and complex and operate in an uncertain
environment. One approach to managing such systems is that of hierarchical decomposition …

In economic situations where action entails a fixed cost, inaction is the norm. Action is taken
infrequently, and adjustments are large when they occur. Interest in economic models that …

This article analyzes the interaction between a firm's dynamic investment, operating, and
financing decisions in a model with operating adjustment and recapitalization costs. Using …

THE EMPIRICAL INVESTMENT literature is full of disappointments. From time to time waves
of new ideas challenge the aggregate investment equation, but these challenges are rarely …

Under transactions costs, and generally any sort of friction, economic agents, acting
dynamically in a stochastic environment, may find it optimal, in some region of the state …