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| Volume 9, No. 1,
April 2010 |
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An Alternative Perspective on
Tobin's Q |
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and Aggregate Investment
Expenditure |
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| Mark J. Holmes |
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Department of Economics,
Waikato University, New Zealand |
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| Abstract |
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This study provides new evidence on the
relationship between Tobin's Q and private investment. Using a
testing procedure advocated by Bierens applied to US data, both
series are found to be stationary around a nonlinear deterministic
trend and are co-trended insofar as they share a common nonlinear
deterministic trend. |
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Key words:
Tobin's Q; investment; nonlinear trend; co-trend |
| JEL
classification:
E2; C2; C3 |
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