publication . Article . 2014

Trends in Business Investment

Lydon, Reamonn; Scally, John;
Open Access
  • Published: 01 Jan 2014
Abstract
This article examines trends in business investment in Ireland. Consistent with the international evidence on investment cycles, we show that business investment in Ireland exhibits large cyclical movements around a long-run trend relative to GDP. Changes in business investment broadly coincide with the overall business cycle, although swings in investment tend to be far greater, with extended periods of both over- and under-investment relative to GDP. The sharp fall in business investment since 2007 is largely explained by both the rapid slowdown and subsequent fall in GDP growth, and the previous cycle of over-investment which resulted in an elevated business ...

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