The striking (though intuitive) conclusion is that investment goes up initially!

Firms in this economy rush to put in their investment orders in order to be able to get the subsidy while it still exists. This is of course exactly what happened in the Dutch case. The adjustment paths for all variables have been drawn in the lower panel of Figure 4.7. The conclusion of this experiment must be that anticipation effects are very important and can give rise to (at first glance) unconventional dynamic adjustment.