Hostname: page-component-7479d7b7d-jwnkl Total loading time: 0 Render date: 2024-07-12T01:17:34.660Z Has data issue: false hasContentIssue false
  • English
  • Français

A comment on adjustment costs accelerator and the flexible

Published online by Cambridge University Press:  17 August 2016

R.W. Latham  and
D.A. Peel
R.W. Latham
Affiliation:
University of Liverpool
D.A. Peel
Affiliation:
University of Liverpool
Get access

Extract

Recent work in the theory of the demand for investment has been characterized by the introduction of adjustment costs. An interesting feature of this analysis is that the flexible accelerator turns out to be a special case of the adjustment cost model when the wage rate, the price of output, and the discount rate remain constant over time. No doubt this has been the source of some comfort for empirical workers in spite of its unrealism.

Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 39 , Issue 3 , September 1973 , pp. 371 - 376
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1973 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Arrow, K.J. (1965), Aspects of the Theory of Risk Bearing Helsinki 1965.Google Scholar
Eisner, R., and Strotz, R.H. (1963), Determinants of Business Investment, Research Study Two in Impacts of Monetary Policy, Englewood Cliffs, N.J., Prentice-Hall.Google Scholar
Gould, J.P. (1968), Adjustment Costs in the Theory of Investment of the Firm, Review of Economic Studies, 35.Google Scholar
Latham, R.W., and Peel, D.A. (1972), User Cost and the Preference Function, University of Liverpool (mimeo) (forthcoming in the Quarterly Journal of Economics).Google Scholar
Lucas, R.E. (1967), Optimal Investment Policy and the Flexible Accelerator, International Economic Review, 8.Google Scholar
Treadway, A.B. (1969), On Rational Entrepreneurial Behaviour and the Demand for Investment, Review of Economic Studies, 36.Google Scholar