Investment and Factor Demand (eBook)

Front Cover 1
Investment and Factor Demand 4
Copyright Page 5
Table of Contents 12
INTRODUCTION TO THE SERIES 6
Foreword 8
Acknowledgements 11
CHAPTER 1. Theoretical foundations and main models 14
Introduction 14
1. THEORETICAL FOUNDATIONS 14
2. MAIN RESULTS ON FRENCH DATA 42
Conclusion 53
CHAPTER 2. Econometric models of investment : a comparative study on annual data 54
Introduction 54
1. THEORETICAL FOUNDATIONS 55
2. AN ECONOMETRIC ESTIMATE ON ANNUAL DATA 69
Conclusion 96
APPENDIX 1 Statistical sources for annual time-series estimates (1949-1974) 98
APPENDIX 2 Additional econometric data on the profit and accelerator-profits models 99
APPENDIX 3 Search for optimal pattern of accelerator lags (residual variance of adjustment x 10-4) 100
APPENDIX 4 Responsiveness of general-model coefficients to the specification of acceleration-effect lags 100
CHAPTER 3. A reconsideration of the comparison between putty-putty and putty-clay hypotheses in the estimation of effective demands for investment 102
Introduction 102
1. EFFECTIVE DEMAND FOR INVESTMENT AND THE FORM OF THE PRODUCTION FUNCTION 103
2. BISCHOFF'S ESTIMATE REVISITED 105
3. ACCUMULATION-RATE SPECIFICATIONS 108
CONCLUSION 113
CHAPTER 4. Economic policy and investment in the 1970s 114
Introduction 114
1. DESCRIPTION OF POLICIES AFFECTING INVESTMENT 118
2. THE IMPACT OF PUBLIC POLICY MEASURES : AN ASSESSMENT BASED ON THE "METRIC" MODEL 125
CONCLUSION 131
CHAPTER 5. A joint estimation of demand for investment and labor 134
Introduction 134
1. SPECIFICATION OF THE INVESTMENT DEMAND AND LABOR DEMAND 135
2. ESTIMATES ON ANNUAL SERIES 138
3. ESTIMATES ON QUARTERLY DATA 146
Conclusion 151
CHAPTER 6. The dynamics of investment and employment with capital and labor adjustment costs 156
Introduction 156
1. MODEL WITH DEMAND CONSTRAINT 157
2. MODEL WITH NO DEMAND CONSTRAINT 168
3. ESTIMATE 172
Conclusion 178
APPENDIX 1 Calculation of the Hessian of (1') 179
APPENDIX 2 Resolution of the differential equation (10) 179
APPENDIX 3 Analysis of the dynamics of (19) 184
CHAPTER 7. Production functions with the energy factor : estimations for the major OECD countries 186
Introduction 186
1. SUMMARY OF RECENT WORK 188
2. ECONOMETRIC STUDY 191
3. INTERPRETATION : EFFECTS OF RELATIVE-PRICE SHIFTS BY COUNTRY 206
Conclusion 213
Appendix 213
CHAPTER 8. Investment with demand, labor and financial constraints : the estimation of a multi-regime model 222
Introduction 222
1. THE SPECIFICATION OF THE MODEL 223
2. ESTIMATES THAT OMIT THE LABOR CONSTRAINT 232
3. INTRODUCING THE LABOR CONSTRAINT 240
Conclusion 242
APPENDIX 1 Likelihood and mathematical expectation of the endogenous variable for the two-regime model 244
APPENDIX 2 Differentiated expressions of investment demand functions 246
APPENDIX 3 252
CHAPTER 9. Production capacity, factor demands and demand uncertainty 254
Introduction 254
1. The model and the optimality conditions 255
2. Stationary solution and steady-state growth 260
3. SPECIFICATION FOR THE ECONOMETRIC ESTIMATION 263
4. ESTIMATION 266
Conclusion 275
APPENDIX 1 Hessian of the problem 277
APPENDIX 2 Optimality conditions when firms must preserve employment N*(perfect rigidity of employment) 278
APPENDIX 3 Matrix A (equation (18)) 279
EPILOGUE. Econometric models in France: recent developments 282
1. INSTABILITY OF THE TRADITIONAL MODEL 282
2 - MODELS BASED ON PROFITABILITY 287
APPENDIX The user-cost-of-capital series 290
CONCLUSION 298
References 300
SUBJECT INDEX 318