IDEAS home Printed from https://ideas.repec.org/p/ags/ircipa/295062.html

Supply Elasticities in the Presence of Adjustment Costs

Author

Listed:
  • Wilcoxen, Peter

Abstract

The adjustment-cost model of investment provides a rigorous basis for deriving a firm's price elasticity of output over various lengths of run. Moreover, parameters of the adjustment cost function itself play a prominent role in determining the size of the elasticity over the medium and long run. In this paper, we demonstrate how to derive supply elasticities from the optimization problem of a firm with a Cobb-Douglas production function (the CES case is treated in an appendix). We then compute elasticities for interesting values of the model's parameters, and argue that correct treatment of adjustment costs is essential to obtaining realistic behaviour from exporting sectors in general equilibrium models.

Suggested Citation

  • Wilcoxen, Peter, 1990. "Supply Elasticities in the Presence of Adjustment Costs," Impact Project Archive 295062, Impact Research Centre, University of Melbourne.
    • Handle: RePEc:ags:ircipa:295062
    DOI: 10.22004/ag.econ.295062
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/295062/files/melbourne029.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.295062?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. is not listed on IDEAS
    2. Goyal, Ashima, 1994. "Growth dynamics in a general equilibrium macroeconomic model for India," Journal of Policy Modeling, Elsevier, vol. 16(3), pages 265-289, June.

    More about this item

    Keywords

    ;

    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:ags:ircipa:295062. 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: AgEcon Search (email available below). General contact details of provider: .

    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.