Unifying time-to-build theory
Several contributions have recently reconsidered the role of the time to build assumption in explaining some relevant stylized facts. In this paper, the similarities and differences which may emerge when the time to build structure of capital is introduced in a continuous or discrete time framework are studied and enlightened. The most striking difference lies in the dimensionality of the two frameworks, which is always finite in discrete but infinite in continuous time. Then, the deterministic version of the traditional time to build model developed by Kydland and Prescott is presented, and it is shown how the typical time to build model setup in continuous time can be obtained. Moreover, the richest dynamics in continuous time is investigated and, more importantly, it is shown that the predictions in terms of capital, output, and consumption behavior are not signi¯cantly di®erent from its discrete version once the economy is calibrated properly.
|Date of creation:||Oct 2008|
|Contact details of provider:|| Postal: Zürichbergstrasse 18, ZUE, CH-8092 Zürich|
Phone: +41 44 632 03 87
Fax: +41 44 632 13 62
Web page: http://www.cer.ethz.ch
More information through EDIRC
References listed on IDEAS
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.:
- Comin, D. & Gertler, M., 2003.
"Medium Term Business Cycles,"
03-05, C.V. Starr Center for Applied Economics, New York University.
- Grandmont, Jean-Michel & Pintus, Patrick & de Vilder, Robin, 1998.
"Capital-Labor Substitution and Competitive Nonlinear Endogenous Business Cycles,"
Journal of Economic Theory,
Elsevier, vol. 80(1), pages 14-59, May.
- GRANDMONT, Jean-Michel & PINTUS, Patrick & de VILDER, Robin, 1997. "Capital-labor substitution and competitive nonlinear endogenous business cycles," CORE Discussion Papers 1997087, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Jean-Michel Grandmont & P, A, Pintus & R, De Vilder, 1997. "Capital-Labor Substitution and Competitive Nonlinear Endogenous Business Cycles," Working Papers 97-28, Centre de Recherche en Economie et Statistique.
- Gary Hansen, 2010.
"Indivisible Labor and the Business Cycle,"
Levine's Working Paper Archive
233, David K. Levine.
- Blanchard, Olivier Jean & Kahn, Charles M, 1980. "The Solution of Linear Difference Models under Rational Expectations," Econometrica, Econometric Society, vol. 48(5), pages 1305-1311, July.
- Boucekkine, Raouf & Licandro, Omar & Puch, Luis A. & del Rio, Fernando, 1999.
"Vintage Capital and the Dynamics of the AK Model,"
Discussion Papers (IRES - Institut de Recherches Economiques et Sociales)
2000009, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Raouf Boucekkine & Omar Licandro & Luis A. Puch & Fernando del Rio, "undated". "Vintage capital and the dynamics of the AK model," Working Papers 2000-01, FEDEA.
- BOUCEKKINE, Raouf & LICANDRO, Omar & PUCH, Luis A. & DEL RIO, Fernando, "undated". "Vintage capital and the dynamics of the AK model," CORE Discussion Papers RP 1757, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- R. Boucekkine & F. del Rio & O. Licandro & Luis A. Puch, 2000. "Vintage Capital and the Dynamics of the AK Model," Econometric Society World Congress 2000 Contributed Papers 0436, Econometric Society.
- Boucekkine, Raouf & Del Rio, Fernando & Licandro, Omar, 2000. "Vintage capital and the dynamics of the AK model," CEPREMAP Working Papers (Couverture Orange) 0003, CEPREMAP.
- Raouf BOUCEKKINE & Omar LICANDRO & Luis A. PUCH & Fernando DEL RIO, 2002. "Vintage Capital And the Dynamics of the AK Model," Economics Working Papers ECO2002/07, European University Institute.
- Raouf Boucekkine & Omar Licandro & Luis A. Puch & Fernando del Rio, 2003. "Vintage capital and the dynamics of the AK model," Documentos de Trabajo del ICAE 0310, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico.
- Patrick Asea & Paul J. Zak, 1997.
"Time-to-Build and Cycles,"
UCLA Economics Working Papers
767, UCLA Department of Economics.
- Paul Gomme & Finn E. Kydland & Peter Rupert, 2001.
"Home Production Meets Time to Build,"
Journal of Political Economy,
University of Chicago Press, vol. 109(5), pages 1115-1131, October.
- Romer, Paul M, 1986.
"Increasing Returns and Long-run Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 94(5), pages 1002-1037, October.
- Adams, James D, 1990. "Fundamental Stocks of Knowledge and Productivity Growth," Journal of Political Economy, University of Chicago Press, vol. 98(4), pages 673-702, August.
- Edge, Rochelle M., 2007. "Time-to-build, time-to-plan, habit-persistence, and the liquidity effect," Journal of Monetary Economics, Elsevier, vol. 54(6), pages 1644-1669, September.
- Casares, Miguel, 2006. "Time-to-build, monetary shocks, and aggregate fluctuations," Journal of Monetary Economics, Elsevier, vol. 53(6), pages 1161-1176, September.
- Montgomery, Michael R., 1995. "'Time-to-build' completion patterns for nonresidential structures, 1961-1991," Economics Letters, Elsevier, vol. 48(2), pages 155-163, May.
When requesting a correction, please mention this item's handle: RePEc:eth:wpswif:08-98. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.