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An Empirical Model of Factor Adjustment Dynamics: Working Paper 2006-13


  • Juan M. Contreras


This paper investigates how firms dynamically adjust their use of capital, labor, energy, and materials when there are both smooth and lumpy adjustment possibilities and interrelation among adjustments. The Colombian Annual Census of Manufacturing provides evidence of these kinds of adjustment. The innovation of this paper lies in three areas: in considering the joint adjustment and interrelation of labor and capital at the establishment level; in describing the dynamic adjustment of all the production factors; and in a rich description of adjustment costs, which includes disruption of the

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  • Juan M. Contreras, 2006. "An Empirical Model of Factor Adjustment Dynamics: Working Paper 2006-13," Working Papers 18250, Congressional Budget Office.
  • Handle: RePEc:cbo:wpaper:18250

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