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Capital Utilization and the Willingness to Rest: A General Equilibrium Analysis

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  • Martial Dupaigne

    (Universite Paris 1 and CREST)

Abstract

This paper develops a general equilibrium model acknowledging that greater capital utilization requires either longer hours or unsocial schedules. Contrary to the popular depreciation-in-use models, capital utilization does not only concern the firms' organisational choices but also labor supply behaviours, since an increase in the workweek of capital affects the households' welfare. Capital utilization and shiftworking are endogenously determined as equilibrium outcomes though - this was not the case in previous studies linking capital utilization to work conditions. A number of relevant cases where capital utilization does vary over the cycle are numerically illustrated : factor complementarity, quasi-fixity of input stocks and nominal rigidities.

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Bibliographic Info

Paper provided by Econometric Society in its series Econometric Society World Congress 2000 Contributed Papers with number 0391.

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Date of creation: 01 Aug 2000
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Handle: RePEc:ecm:wc2000:0391

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  1. Greenwood, Jeremy & Hercowitz, Zvi & Huffman, Gregory W, 1988. "Investment, Capacity Utilization, and the Real Business Cycle," American Economic Review, American Economic Association, vol. 78(3), pages 402-17, June.
  2. Fabrice Collard & Martial Dupaigne, 1999. "Output Dynamics and the Workweek of Capital," Working Papers 99-28, Centre de Recherche en Economie et Statistique.
  3. Cho, Jang-Ok & Cooley, Thomas F, 1995. "The Business Cycle with Nominal Contracts," Economic Theory, Springer, vol. 6(1), pages 13-33, June.
  4. Martial DUPAIGNE, 1998. "Capital operating time and economic fluctuations," Discussion Papers (REL - Recherches Economiques de Louvain) 1998031, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  5. Jean-François Fagnart & Omar Licandro & Franck Portier, 1999. "Firm Heterogeneity, Capacity Utilization and the Business Cycle," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 2(2), pages 433-455, April.
  6. Bils, Mark & Cho, Jang-Ok, 1994. "Cyclical factor utilization," Journal of Monetary Economics, Elsevier, vol. 33(2), pages 319-354, April.
  7. Wen, Yi, 1998. "Capacity Utilization under Increasing Returns to Scale," Journal of Economic Theory, Elsevier, vol. 81(1), pages 7-36, July.
  8. Kydland, Finn E. & Prescott, Edward C., 1988. "The workweek of capital and its cyclical implications," Journal of Monetary Economics, Elsevier, vol. 21(2-3), pages 343-360.
  9. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
  10. Foss, Murray F, 1981. "Long-Run Changes in the Workweek of Fixed Capital," American Economic Review, American Economic Association, vol. 71(2), pages 58-63, May.
  11. Cooley, Thomas F. & Hansen, Gary D., 1998. "The role of monetary shocks in equilibrium business cycle theory: Three examples," European Economic Review, Elsevier, vol. 42(3-5), pages 605-617, May.
  12. repec:fth:inseep:9928 is not listed on IDEAS
  13. Kostiuk, Peter F, 1990. "Compensating Differentials for Shift Work," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 1054-75, October.
  14. Omar LICANDRO, 1992. "Q Investment Models, Factor Complementarity and Monopolistic Competition," Discussion Papers (REL - Recherches Economiques de Louvain) 1992014, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  15. Sneessens, Henri R., 1987. "Investment and the inflation-unemployment tradeoff in a macroeconomic rationing model with monopolistic competition," European Economic Review, Elsevier, vol. 31(3), pages 781-808, April.
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