David Lipton: Some believe that the key to more business investment is less uncertainty about fiscal policy, regulation, and structural reforms. Some believe that it is providing better financing…. The facts suggest a much simpler answer: Business investment has been weak because economic activity has been weak. Ensuring a recovery in sales and sales prospects is the key.
A study we published in the April 2015 World Economic Outlook suggests that virtually all of the weakness in business investment in advanced economies since the crisis can be explained by the weakness in the economic environment… in line with the ‘accelerator effect,’ where investment responds to changes in output and sales….
WCEG — The Equitablog
Must-Read: David Lipton: The Key to Raising Business Investment: Keep Pushing the Accelerator