Investment, Profitability and the Valuation Ratio

摘要

This study examines the treatment of profitability factors in theoretical models of investment and compares the performance of the models in the United Kingdom. The conclusions tentatively support the view that models with explicit treatment of profitability influences (Tobin's valuation ratio, q, and Jorgenson's neoclassical model) perform better than the simple accelerator model with no explicit allowance. (Copyright (c) Bank of England 1981).