Expectations and Factor Demand
This paper develops and estimates a model of interrelated factor demand with rational expectations, in the presence of internal adjustment costs. Invariant technological parameters are distinguished from the firm's adjustment parameters, which change when the exogenous processes faced by the fi...
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| Veröffentlicht in: | The review of economics and statistics 1986-08, Vol.68 (3), p.423-431 |
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| container_end_page | 431 |
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| container_title | The review of economics and statistics |
| container_volume | 68 |
| creator | Kokkelenberg, Edward C. Bischoff, Charles W. |
| description | This paper develops and estimates a model of interrelated factor demand with rational expectations, in the presence of internal adjustment costs. Invariant technological parameters are distinguished from the firm's adjustment parameters, which change when the exogenous processes faced by the firm change. The capital demand equation is derived by solving the Euler equations which stem from minimization of the present value of costs. Future exogenous variables are supplied from solutions of ARIMA equations. The model is tested on postwar quarterly data for U.S. manufacturing. A Regime change in the process for energy prices is simulated, as is a temporary suspension of the investment tax credit. |
| doi_str_mv | 10.2307/1926019 |
| format | Article |
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| fulltext | fulltext |
| identifier | ISSN: 0034-6535 |
| ispartof | The review of economics and statistics, 1986-08, Vol.68 (3), p.423-431 |
| issn | 0034-6535 1530-9142 |
| language | eng |
| recordid | cdi_proquest_journals_194685205 |
| source | JSTOR Mathematics and Statistics; Business Source Complete; JSTOR; Periodicals Index Online |
| subjects | Capital investments Capital stocks Demand Dynamic Economic expectations Economic models Economic theory Elasticity of demand Factors Investment tax credits Labor productivity Mathematical models Modeling Rational expectations Rational expectations theory Time series forecasting |
| title | Expectations and Factor Demand |
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