Further development of a distributed lag investment function

Parameters have been estimated for an amended version of Eisner's distributed lag investment function. Like Eisner, we found that accelerator effects prove to be concentrated among firms evidencing moderate to rapid growth in sales and gross fixed assets; however, significant portions of the variance in current capital expenditures are also accounted for by differences in the previous rate of growth of gross fixed assets. Profits again appear to be a proxy variable while our estimate of the strength of the relationship between differences in depreciation ratios and the variance in gross capital expenditures tends to be weaker than Eisner's similar estimate.