Working Paper

Optimal investment policy with fixed adjustment costs and complete irreversibility


Nicolas Roys

Published Date

24 November 2007


Working Paper (CWP29/07)

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.