IDEAS home Printed from https://ideas.repec.org/a/cai/repdal/redp_295_0693.html
   My bibliography  Save this article

Investissement et embauche avec coûts d’ajustement fixes et asymétriques

Author

Listed:
  • Xavier Fairise
  • Jérome Glachant

Abstract

A firm operating in a deterministic and continuous time world uses a Cobb-Douglas technology with diminishing returns and faces complex adjustment costs of its factors. On the one hand, a proportional cost of employment applies to the irreversible labor factor. On the other hand, investing requires a fixed cost that is proportional to the firm?s workforce. The firm then determines its hiring and investment policy which maximizes the discounted value of its cash flows. The combination of fixed and variable costs involves a non-trivial cycle of factors adjustment in which there is a continuous hiring episode followed by a hiring freeze followed by a simultaneous spike in investment and hiring. The article proposes a numerical assessment of the effects of fixed cost size on the life cycle of the firm. Codes JEL : C61, D92, E22, E24

Suggested Citation

  • Xavier Fairise & Jérome Glachant, 2019. "Investissement et embauche avec coûts d’ajustement fixes et asymétriques," Revue d'économie politique, Dalloz, vol. 129(5), pages 693-713.
    • Handle: RePEc:cai:repdal:redp_295_0693
    as

    Download full text from publisher

    File URL: http://www.cairn.info/load_pdf.php?ID_ARTICLE=REDP_295_0693
    Download Restriction: free
    File URL: http://www.cairn.info/revue-d-economie-politique-2019-5-page-693.htm
    Download Restriction: free
    ---><---

    Other versions of this item:

    More about this item

    Keywords

    Investment; hiring; fixed cost; asymmetric linear costs; irreversibility;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cai:repdal:redp_295_0693. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jean-Baptiste de Vathaire (email available below). General contact details of provider: https://www.cairn.info/revue-d-economie-politique.htm .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.