8 / 16  BIS central bankers' speeches  As is well known, Tobin’s Q is defined as the market value of a firm’s assets (typically measured by its equity price) divided by its accounting value or replacement costs. Under certain assumptions, it should capture the main economic fundamentals determining investment.
9 / 16  BIS central bankers' speeches  Therefore, Döttling, Gutiérrez and Philippon (2017b) infer from fact 3) above that weak aggregate demand and low expected future growth must explain the low Q in the euro area, which in turn explains most of the aggregate euro area investment slump (notably in Austria, Belgium, Finland, France, Germany and the Netherlands, but not in Italy or Spain).