Recognizing Investment Opportunities at the Onset of Recoveries

Investment decision-making is modeled by means of a Kohonen neural net, where neurons represent firms. This is done in order to model investments in novel fields of economic activity, that according to this model are carried out when firms recognize the emergence of a new technological pattern. Combination of the equations of Kohonen model neuron with macroeconomic relationships yields disaggregated accelerator equations with flexible coefficients, that in the aggregate and fixed-coefficients case boil down to the traditional accelerator equations. A simulation tests the model in a situation that is remindful of the very beginning of economic recoveries.