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Exchange Rate Variations and Capacity Utilization. A Specific Factors, Temporary Equilibrium Analysis / Wechselkursschwankungen und Kapazitätsauslastung. Eine Analyse kurzfristiger Gleichgewichte in einer Ökonomie mit sektorspezifischen Faktoren

Author

Listed:
  • Wemhöner Frederik

    (Frankfurt Commerzbank AG, ZAM-Investment Research, D-60261 Frankfurt)

  • DeLorme Charles D.
  • Naqvi Nadeem

    (University of Georgia, Department of Economics, 147 Brooks Hall, Athens, Georgia 30 602, USA)

Abstract

We identify the non-Walrasian, fix-price, flex-quantity, temporary equilibria of a specific factors economy that has a traded and a nontraded sector. In this framework, we investigate the effects of exchange rate shocks on capacity utilization and employment of labor. We find that the asymmetry between the specific factors and the mobile factor that obtains in the Walrasian equilibrium also extends to non-Walrasian temporary equilibria: in a Walrasian (non-Walrasian temporary) equilibrium, the specific factors' prices (employment levels) move in a direction opposite to the one in which the price (employment level) of the mobile factor changes.

Suggested Citation

  • Wemhöner Frederik & DeLorme Charles D. & Naqvi Nadeem, 1995. "Exchange Rate Variations and Capacity Utilization. A Specific Factors, Temporary Equilibrium Analysis / Wechselkursschwankungen und Kapazitätsauslastung. Eine Analyse kurzfristiger Gleichgewichte in e," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 214(2), pages 130-145, April.
    • Handle: RePEc:jns:jbstat:v:214:y:1995:i:2:p:130-145
    DOI: 10.1515/jbnst-1995-0203
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