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 standard (S,s) bands, firms` adjustment policies are probabilistc, with a probability of adjusting specification of the distribution of fixed adjustment costs, the adjustment hazards approach encompasses models ranging
We present a model of coups in autocracies. Assuming that policy choices cannot be observed but are correlated with the short-run performance of the economy we find that: (a) the threat of a coup disciplines autocrats; (b) coups are more likely in recessions; (c) increasing per capita income has an ambiguous effect on the probability
