Investment Behavior, Observable Expectations, and Internal Funds: Corrigendum

This erratum corrects two errors in the results presented in Cummins, Hassett, and Oliner (2006). First, the dating of one series in the bottom panel of Figure 2 was off by one year. The value we showed for the percent change in the ratio of cash flow to investment (CF/K) for year t actually represented the value for the previous year in our dataset. The corrected version of this panel is shown below. Similarly, the GMM estimates in Table 3 for the sample of unrated firms (columns 3 and 6) reflected data for CF/K that were inadvertently lagged by one year. The corrected version of Table 3 is shown below. We thank Senay Agca for bringing these errors to our attention. In the course of checking the results in the paper, we also discovered that the datasets posted on the AER website for replicating the results in Table 6 do not contain the correct data. Unfortunately, we cannot post the appropriate datasets for Table 6 because we did not save the source data files. We have revised the “readme” file in the posted documentation to alert readers to this problem.