Entry Dynamics, Capacity Utilisation and Productivity in a Dynamic Open Economy
AbstractThis paper analyses an open economy Ramsey model with an endogenous labour supply without capital. The technology defines an optimal firm size. Changes to the number of firms is subject to adjustment costs, so that the entry dynamics is determined endogenously. We find that there is a short run transitory productivity dynamic introduced when there is imperfect competition due to changes in capacity utilization. We are able to analyze this in different contexts, including demand and technology shocks, both anticipated and unanticipated.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 716.
Date of creation: 2002
Date of revision:
entry; capacity utilisation; adjustment costs; Ramsey;
Other versions of this item:
- Marta Aloi & Huw Dixon, . "Entry Dynamics, Capacity Utilisation and Productivity in a Dynamic Open Economy," Discussion Papers 02/05, Department of Economics, University of York.
- E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
- E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
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