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Endogenous Disinvestment Activities and the Transformation to a new Equilibrium. A computable general equilibrium approach

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  • Norén, Ronny

    () (Department of Social Sciences)

Abstract

The contribution of this book is the explicit recognitation of the importance of endogenous disinvestment activities to a new equilibrium. This is embodied in the condition specifying the economic life of capital to account for obsolescence. This specification provides the formal link between capital formation and production capacity. Thus, the transformation process will be endogenously specified in the model. In technical terms, the economic structure is illustrated by the help of a computable general equilibrium (CGE) model of an open economy. The numerical applications is an examination of the sensitivity of the model to systematic variation in key variables of the transformation process, and the variations that may appear through changes in domestic and international conditions. This book, organised in 6 chapters, is designed as a textbook and a research publication in combination. In rough outline, Chapter 2 and 3 is a pure textbook representation, and Chapter 4, 5 and 6 are representative chapters of the research publication.

Suggested Citation

  • Norén, Ronny, 2001. "Endogenous Disinvestment Activities and the Transformation to a new Equilibrium. A computable general equilibrium approach," Umeå Economic Studies 569, Umeå University, Department of Economics.
  • Handle: RePEc:hhs:umnees:0569
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    References listed on IDEAS

    as
    1. Feldstein, Martin S & Rothschild, Michael, 1974. "Towards an Economic Theory of Replacement Investment," Econometrica, Econometric Society, vol. 42(3), pages 393-423, May.
    2. Noren, Ronny, 1998. "Industrial Transformation in the Open Economy: A Multisectoral View," Journal of Policy Modeling, Elsevier, vol. 20(1), pages 111-117, February.
    3. Benjamin, Nancy, 1990. "Devaluations and credibility in structural adjustment policy," Journal of Policy Modeling, Elsevier, vol. 12(4), pages 659-669.
    4. Shoven,John B. & Whalley,John, 1992. "Applying General Equilibrium," Cambridge Books, Cambridge University Press, number 9780521266550.
    5. Schworm, William E., 1979. "Tax policy, capital use, and investment incentives," Journal of Public Economics, Elsevier, vol. 12(2), pages 191-204, October.
    6. Auerbach, Alan J, 1979. "Inflation and the Choice of Asset Life," Journal of Political Economy, University of Chicago Press, vol. 87(3), pages 621-638, June.
    7. Coates, Dennis, 1991. "Endogenous Capital Utilization and Taxation of Corporate Capital," National Tax Journal, National Tax Association;National Tax Journal, vol. 44(1), pages 79-91, March.
    8. Coates, Dennis, 1991. "Endogenous Capital Utilization and Taxation of Corporate Capital," National Tax Journal, National Tax Association, vol. 44(1), pages 79-91, March.
    9. Herbert E. Scarf, 1967. "On the Computation of Equilibrium Prices," Cowles Foundation Discussion Papers 232, Cowles Foundation for Research in Economics, Yale University.
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    More about this item

    Keywords

    Economic obsolescence; CGE model; transformation; capital rent; open economy;

    JEL classification:

    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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