A Comment on Feldstein's Fisher-Schultz Lecture

11 Pages Posted: 18 Aug 2004 Last revised: 13 Sep 2008

See all articles by Ray C. Fair

Ray C. Fair

Yale University - Cowles Foundation; Yale School of Management - International Center for Finance

Date Written: July 1981

Abstract

Feldstein argues in his Fisher-Schultz Lecture that he has found, by accounting for inflation and taxes, large and significant rate of return effects on investment. His results are interesting because they seem to be robust to alternative specifications of the investment equation. Feldstein has clearly not exhausted all possible specifications of the investment equation, and this comment reports on results, using Feldstein's data, for one alternative specification. The results do not support Feldstein's conclusion. The data do not appear to contain enough information to decide the issue of the quantitative effect of the cost of capital on investment.

Suggested Citation

Fair, Ray C., A Comment on Feldstein's Fisher-Schultz Lecture (July 1981). NBER Working Paper No. w0716. Available at SSRN: https://ssrn.com/abstract=349109

Ray C. Fair (Contact Author)

Yale University - Cowles Foundation ( email )

Box 208281
New Haven, CT 06520-8281
United States
203-432-3715 (Phone)
203-432-6167 (Fax)

HOME PAGE: http://fairmodel.econ.yale.edu

Yale School of Management - International Center for Finance ( email )

Box 208200
New Haven, CT 06520
United States
203-432-3715 (Phone)
203-432-6167 (Fax)

HOME PAGE: http://fairmodel.econ.yale.edu

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