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Non-convexities in the Adjustment of Different Capital Inputs: A Firm-level Investigation
Del Boca, Alessandra; Galeotti, Marzio; Rota, Paola - 2003
Recent developments in investment research have highlighted the importance of non-convexities and irreversibilities in … and structures and construct measures of fundamental Q to capture investment opportunities associated with each asset. To … uncover the pattern of dynamic adjustment we use non-parametric techniques to relate each individual investment to own …
Persistent link: https://www.econbiz.de/10011325051
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The irreversibility premium
Chirinko, Robert S.; Schaller, Huntley - 2008
When investment is irreversible, theory suggests that firms will be "reluctant to invest." This reluctance creates a … wedge between the discount rate guiding investment decisions and the standard Jorgensonian user cost (adjusted for risk). We …
Persistent link: https://www.econbiz.de/10010264335
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Investment spending, equilibrium indeterminacy, and the interactions of monetary and fiscal policy
Lubik, Thomas A. - 2003
guarantee existence. When investment adjustment costs are introduced, the monetary and fiscal policy dichotomy is in principle …
Persistent link: https://www.econbiz.de/10010293451
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The marginal product of capital: a persistent international puzzle
Chirinko, Robert S.; Mallick, Debdulal - 2008
Large and sustained differences in marginal products of capital (MPKs) across countries are sharply at odds with the core implications of the neoclassical framework. Lucas (1990) and many subsequent studies have examined reasons for this MPK differential. In a recent contribution, Caselli and...
Persistent link: https://www.econbiz.de/10010264438
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Investment behavior in dynamic computable general equilibrium models for transition economies
Piazolo, Daniel - 1998
This paper suggests a method of approximating the development of investment in transition economies through an … amendment of the standard adjustment cost formulation for investment within dynamic Computable General Equilibrium (CGE) models …. Letting adjustment cost depend on the difference between the investment levels of two periods (rather than only on the gross …
Persistent link: https://www.econbiz.de/10010275222
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Empirical representation of firms' employment decisions by an (S,s) rule
Rota, Paola - 2001
We analyse the conditions under which an (S,s) rule may be derived and compare these with alternative rules. We consider the case of labour demand with fixed adjustment costs. The (S,s) rule implies a specific ordering of choices: downward adjustment, non-adjustment and upward adjustment with...
Persistent link: https://www.econbiz.de/10011608783
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Why do firms use fixed-term contracts?
Portugal, Pedro; Varejão, José - 2009
Temporary forms of employment account for a variable but never trivial share of total employment in both the U.S. and in Europe. In this article we look at how one specific form of temporary employment - employment with fixed-term contracts - fits into employers' hiring policies. We find that...
Persistent link: https://www.econbiz.de/10010271266
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The intensive margin puzzle and labor market adjustment costs
Wesselbaum, Dennis - 2011
This paper documents a puzzling fact, namely that there is a significant negative relation between employment protection legislation and the usage of the intensive margin of labor market adjustments. We then make use of a Real Business Cycle model and introduce search and matching frictions as...
Persistent link: https://www.econbiz.de/10010274437
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Trade liberalization and labor market dynamics
Dix-Carneiro, Rafael - 2011
I study trade-induced transitional dynamics by estimating a structural dynamic equilibrium model of the Brazilian labor market. The model features a multi-sector economy with overlapping generations, heterogeneous workers, endogenous accumulation of sector-specific experience and costly...
Persistent link: https://www.econbiz.de/10010326791
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Econometric issues in estimating user cost elasticity
Schaller, Huntley - 2006
The user cost elasticity is a parameter of considerable importance in economics, with implications for the effects of budget deficits, tax-based savings incentives, monetary policy, corporate taxes, and tariffs and quotas on capital goods. This paper analyzes the econometric issues that account...
Persistent link: https://www.econbiz.de/10010293745