Dynamic Factor Demand in a Rationing Context: Theory and Estimation of a Macroeconomic Disequilibrium Model for the Federal Republic of Germany

ISBN-13: 9783790807127 / Angielski / Miękka / 1993 / 242 str.

Werner Smolny

Opis

This treatise develops a macroeconomic disequilibrium model of the Federal Republic of Germany. The estimation results show the significant underutilization of labour, and indicate the importance of supply constraints for imports and exports.

Spis treści

I Theory.- 1 Disequilibrium models.- 1.1 Recent developments in Keynesian macroeconomics.- 1.2 Microfoundations of wage and price rigidity.- 1.2.1 The rigidity of prices.- 1.2.2 The stickiness of wages.- 1.2.3 Theories of wage and price change.- 1.3 Fix-price models.- 1.4 Dynamic factor demand.- 1.4.1 Theoretical and empirical work on adjustment costs.- 1.4.2 Specification of adjustment costs.- 1.4.3 The role of time for adjustment.- 2 The basic model.- 2.1 Assumptions.- 2.1.1 Wages, prices, and capital costs.- 2.1.2 The concept of micro-markets.- 2.1.3 The dynamic decision structure.- 2.2 The optimization program of the firm.- 2.2.1 Output.- 2.2.2 Employment.- 2.2.3 The investment decision.- 2.2.3.1 The optimal capital stock.- 2.2.3.2 The derivation of the optimal capital-labour ratio.- 2.3 Regimes on the goods and labour market.- 2.4 Appendix A.- 2.5 Appendix B: list of symbols.- 3 Extensions of the basic model.- 3.1 Overtime working.- 3.2 Dynamic input adjustment.- 3.2.1 Dynamic adjustment of employment.- 3.2.2 Investment and capital-labour substitution.- 3.3 Endogenous wages and prices.- 4 The aggregation of micro-markets.- 4.1 The distribution of micro-markets.- 4.2 Derivation of the CES-property.- 4.3 The quality of the CES-approximation.- II Empirical estimation.- 5 Specification of the model.- 5.1 The recursive structure.- 5.2 The treatment of expectations.- 5.3 The choice of technique.- 5.4 Calculation of demand — the trade equations.- 5.5 Estimation of the minimum conditions.- 5.5.1 Determination of output.- 5.5.2 Labour demand and employment.- 5.6 The demand for capital.- 5.7 Appendix C: data sources and definitions.- 6 Results.- 6.1 Capital-labour substitution.- 6.2 Trade.- 6.3 Output and overtime working.- 6.4 Employment.- 6.5 Capital formation.- Conclusion.