Capital Spending in the Swedish Forest Industry Sector — Four Classical Investment Models

The determinants of capital spending in the Swedish forest industry are analyzed with classical investment models. During the period 1962-1994, ouput and cash-flow are significant determinants of investment, while user cost of capital is not. Thus, fiscal policies targeted at stimulating demand and profits will have an impact on investments according to the models estimated. Monetary policy apparently have lesser or no impact at all, should it affect capital cost.