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In recent years a number of financial economists have been concerned about the lack of growth in capital investments by business firms. In this study I look at the intermediate and long term trends in private fixed investment (PFI) to determine if the severe recession in 2008 has altered business investment growth. Since PFI is divided into structures, equipment and intellectual property (e.g. computer software), it is important to evaluate these sub category trends as well. My research design is as follows; 1) I develop linear trend equations for the periods between time periods 1999-2007 and 2009-2017 to determine if the regression coefficients are significantly different. I test the hypothesis that the b coefficients for the 1999-2007 period are greater than the b coefficients for the 2009-2017 period, 2) I run linear regressions for the complete period of 1999-2017 and include a dummy variable Di and set it equal to one for the 4 quarters in 2008 to determine if there is a downward shift in the regression line due to the 2008 recession, 3) Finally, in the 2009-2017 period there is evidence of a pick-up in both gross domestic product and gross domestic income over the latter half of this period. To see if there is a structural shift upwards in the regression line, I add a second dummy variable, D2 and set it equal to one for the 12 quarters in 2015, 2016, and 2017. I test the hypothesis that an extremely low unemployment rate, steady employment growth and low interest rates have combined to cause an upward shift in private fixed investment in recent years.

Publication Date


Project Designation

Independent Research

Primary Advisor

Tony S Caporale, Robert D Dean

Primary Advisor's Department

Economics and Finance


Stander Symposium poster


Presenter: Bennett Alexander Zynn

Trends In Private Fixed Investment:And the 2008 Recession