Time-To-Build: Interrelated Investment and Labour Demand Modelling With Applications to Six OECD Countries

Time-To-Build: Interrelated Investment and Labour Demand Modelling With Applications to Six OECD Countries

by Marga Peeters

Paperback(Softcover reprint of the original 1st ed. 1995)

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As large physical capital stock projects need long periods to be built, a time-to-build specification is incorporated in factor demand models. Time-to-build and adjustment costs dynamics are identified since by the first moving average dynamics, whereas by the latter autoregressive dynamics are induced. Empirical evidence for time-to-build is obtained from data from the Dutch construction industry and by the estimation result from the manufacturing industry of six OECD countries.

Product Details

ISBN-13: 9783540588092
Publisher: Springer Berlin Heidelberg
Publication date: 03/17/1995
Series: Lecture Notes in Economics and Mathematical Systems , #420
Edition description: Softcover reprint of the original 1st ed. 1995
Pages: 204
Product dimensions: 6.10(w) x 9.25(h) x (d)

Table of Contents

0 Overview.- 0.1 Introduction.- 0.2 Main research aims.- 0.3 Outline.- 1 Physical Capital Stock Investments and Labour Demand, Theoretical background on dynamic modelling.- 1.1 Introduction.- 1.2 Entrepreneurial behaviour.- 1.3 Entrepreneurial behaviour under neoclassical assumptions.- 1.3.1 Model 1: Static labour demand.- 1.3.2 Model 2: Dynamic labour demand.- 1.3.3 Model 3: Dynamic physical capital stock and investments demand.- 1.3.4 Model 4: Interrelation in physical capital stock and labour demand.- 1.4 Dynamics and the literature.- 1.4.1 Dynamics in the neoclassical framework.- 1.4.2 q theory of investments.- 1.4.3 Gestation lags.- 1.5 Short summary and extensions.- 1.A Dynamics and interrelation in structures, equipment and labour in six OECD countries.- 2 Investment Gestation Lags, Construction lags, delivery lags and capital stock accumulation.- 2.1 Introduction.- 2.2 Construction lags.- 2.2.1 The construction process.- 2.2.2 The length of the construction period.- 2.2.3 Cancellations.- 2.3 Time-to-build specification.- 2.4 The difference between construction and delivery lags.- 2.5 Statistical evidence on lead times.- 2.6 The calculation of physical capital stock series.- 2.7 Summary and conclusions.- 3 A Closed form Solution for a Model with Time-to-Build and Adjustment Costs, An application to the United States and Dutch manufacturing industry.- 3.1 Introduction.- 3.2 The model.- 3.2.1 A neoclassical factor demand model with time-to-build.- 3.2.2 Economic interpretation of adjustment costs and time-to-build.- 3.3 Three univariate models for structures.- 3.3.1 Model 1: Time-to-build and no adjustment costs.- 3.3.2 Model 2: Time-to-build and adjustment costs of net capital stock.- 3.3.3 Model 3: Time-to-build and adjustment costs of gross investments.- 3.4 The closed form solution of the trivariate model.- 3.5 Summary of the theoretical part and estimation aims.- 3.6 The estimation results.- 3.6.1 The process of prices.- 3.6.2 Maximum likelihood estimates.- Univariate — United States.- Trivariate — The Netherlands and the United States.- 3.6.3 Impulse responses.- 3.6.4 Comparison of the time-to-build and adjustment costs model.- 3.6.5 Summary of the empirical part.- 3.7 Summary and conclusions.- Appendices.- 3.A Solving the Euler equations of the multivariate model for the rational expectations.- 3.B Stationarity tests.- 3.B.1 Unit roots.- 3.B.2 Cointegration.- 3.B.3 Conclusions.- 4 Persistence, Asymmetries and Interrelation in Manufacturing Structures, Equipment and Labour Demand, An application to six OECD countries.- 4.1 Introduction.- 4.2 Descriptive statistics.- 4.3 A neoclassical factor demand model.- 4.3.1 Model specification.- 4.3.2 First order conditions.- 4.4 Empirical analyses.- 4.4.1 Assumptions and estimation strategy.- 4.4.2 Estimation results.- 4.5 Summary and conclusions.- 4.A Factor prices exogeneity, monopolistic competition or price influencing.- 4.A.1 An example.- 4.A.2 Weak exogeneity and Granger causality tests.- 4.A.3 Conclusions.- 5 Interrelations in Physical Capital Stock, Labour and Inventory Investments, An application to French industrial sectors.- 5.1 Introduction.- 5.2 Volatility and multi-cointegration.- 5.3 Two structural models with inventories.- 5.3.1 A production smoothing model.- 5.3.2 A factor demand model with inventories.- 5.3.3 Similarities and differences between the production smoothing and factor demand model.- 5.4 Empirical results.- 5.4.1 GMM estimation results.- 5.4.2 Prices and sales elasticities.- 5.5 Conclusions.- 6 Summary, Conclusions and Shortcomings.- 6.1 Summary.- 6.2 Conclusions from empirical results.- 6.3 Shortcomings.- 6.4 Overall conclusions and some policy implications.- Data Appendix, Quarterly aggregate data.- I.1 Data sources.- I.2 Aggregate manufacturing industry data of six OECD countries.- I.2.1 Variables used as production factors and prices in chapter 3 and 4.- I.2.2 Data description.- I.2.3 Variables used as instruments in chapter 4.- I.3 Aggregate sectorial data of France (1970.I-1992.IV).- I.3.1 Variables used.- I.3.2 Data description.- I.3.3 Calculation of physical capital stock series.- Author Index.- List of Symbols.

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