The Dynamic Demand for Capital and Labor
AbstractA model of the dynamically interrelated demand for capital and labor is specified and estimated. The estimates are of the first-order conditions of the firm's problem rather than of the closed-form decision rules. This use of the first-order conditions allows a random rate of return and a flexible specification of the technology. The estimates do not imply the very slow rates of adjustment displayed in other, related estimates of the demand for capital. Because adjustment is estimated to be rapid, there is,contrary to the standard view, scope for factor-prices to affect investment at relatively high frequencies.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 1899.
Date of creation: Apr 1986
Date of revision:
Publication status: published as Shapiro, Matthew D."The Dynamic Demand for Capital and Labor," Quarterly Journal of Economics, Vol. 101, No. 3, August 1986, pp. 513-542.
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Other versions of this item:
- Matthew D. Shapiro, 1984. "The Dynamic Demand for Capital and Labor," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 735, Cowles Foundation for Research in Economics, Yale University.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ben S. Bernanke, 1985.
"Employment, Hours, and Earnings in the Depression: An Analysis of EightManufacturing Industries,"
NBER Working Papers
1642, National Bureau of Economic Research, Inc.
- Bernanke, Ben S, 1986. "Employment, Hours, and Earnings in the Depression: An Analysis of EightManufacturing Industries," American Economic Review, American Economic Association, American Economic Association, vol. 76(1), pages 82-109, March.
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