Entry Dynamics, Capacity Utilisation and Productivity in a Dynamic Open Economy
This paper analyses an open economy Ramsey model with an endogenous labour supply without capital. The technology defines an optimal firm size. Changes to the number of firms is subject to adjustment costs, so that the entry dynamics is determined endogenously. We find that there is a short run transitory productivity dynamic introduced when there is imperfect competition due to changes in capacity utilization. We are able to analyze this in different contexts, including demand and technology shocks, both anticipated and unanticipated.
|Date of creation:|
|Contact details of provider:|| Postal: Department of Economics and Related Studies, University of York, York, YO10 5DD, United Kingdom|
Phone: (0)1904 323776
Web page: https://www.york.ac.uk/economics/
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.:
- Morrison, Catherine J., 1986.
"Productivity measurement with non-static expectations and varying capacity utilization : An integrated approach,"
Journal of Econometrics,
Elsevier, vol. 33(1-2), pages 51-74.
- Catherine J. Morrison, 1985. "Productivity Measurement with Nonstatic Expectations and Varying Capacity Utilization: An Integrated Approach," NBER Working Papers 1561, National Bureau of Economic Research, Inc.
- Devereux, Michael B & Head, Allen C & Lapham, Beverly J, 1996. "Monopolistic Competition, Increasing Returns, and the Effects of Government Spending," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 28(2), pages 233-254, May.
- John Groenewegen (ed.), 1994. "Dynamics Of The Firm," Books, Edward Elgar Publishing, number 194.
- Burnside, Craig & Eichenbaum, Martin, 1996.
"Factor-Hoarding and the Propagation of Business-Cycle Shocks,"
American Economic Review,
American Economic Association, vol. 86(5), pages 1154-1174, December.
- Craig Burnside & Martin Eichenbaum, 1994. "Factor Hoarding and the Propagation of Business Cycles Shocks," NBER Working Papers 4675, National Bureau of Economic Research, Inc.
- Julio J. Rotemberg & Michael Woodford, 1993. "Dynamic General Equilibrium Models with Imperfectly Competitive Product Markets," NBER Working Papers 4502, National Bureau of Economic Research, Inc.
- Winston, Gordon C, 1974. "The Theory of Capital Utilization and Idleness," Journal of Economic Literature, American Economic Association, vol. 12(4), pages 1301-1320, December.
- Richard Ericson & Ariel Pakes, 1995. "Markov-Perfect Industry Dynamics: A Framework for Empirical Work," Review of Economic Studies, Oxford University Press, vol. 62(1), pages 53-82.
- Coto-Martinez, Javier & Dixon, Huw, 2003.
"Profits, markups and entry: fiscal policy in an open economy,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 27(4), pages 573-597, February.
- Javier Coto-MartÃnez & Huw D. Dixon, 2001. "Profits, Markups and Entry: Fiscal Policy in an Open Economy," CESifo Working Paper Series 550, CESifo Group Munich.