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Technical Change, Uncertainty, and Investment

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  • Spiro E. Stefanou

Abstract

The expected investment dynamics of the risk-neutral firm is examined in the presence of uncertainty in the future evolution of the real wage and the stock of technical knowledge. A model of the adjustment cost firm is developed that is characterized by quasi-fixed, factor-augmenting technical change that is taken exogenously by the firm. The effect of wage and technical change uncertainty on investment behavior is assessed using comparative stochastic dynamic analysis.

Suggested Citation

  • Spiro E. Stefanou, 1987. "Technical Change, Uncertainty, and Investment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 69(1), pages 158-165.
    • Handle: RePEc:oup:ajagec:v:69:y:1987:i:1:p:158-165.
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    Cited by:

    1. Kane, Sally & Reilly, John & Tobey, James, 1991. "Climate Change: Economic Implications for World Agriculture," Agricultural Economic Reports 308153, United States Department of Agriculture, Economic Research Service.
    2. Catherine Morrison Paul, 2003. "Productivity and Efficiency Measurement in Our “New Economy”: Determinants, Interactions, and Policy Relevance," Journal of Productivity Analysis, Springer, vol. 19(2), pages 161-177, April.
    3. Kim, Tae-Kyun, 1989. "The factor bias of technical change and technology adoption under uncertainty," ISU General Staff Papers 1989010108000010138, Iowa State University, Department of Economics.
    4. Price, T. Jeffrey & Wetzstein, Michael E., 1999. "Irreversible Investment Decisions In Perennial Crops With Yield And Price Uncertainty," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 24(1), pages 1-13, July.
    5. Mario Ekboir, Javier, 1997. "Technical change and irreversible investment under risk," Agricultural Economics, Blackwell, vol. 16(1), pages 55-65, March.
    6. Morrison Paul, Catherine J., 2000. "Productivity And Efficiency In The U.S. Food System, Or, Might Cost Factors Support Increasing Mergers And Concentration?," Working Papers 11983, University of California, Davis, Department of Agricultural and Resource Economics.
    7. Fisher, Brian S. & Thorpe, Sally, 1990. "Issues In Resource Management," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 34(2), pages 1-16, August.

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