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Investment, Output and Labor Constraints, and Financial Constraints: The Estimation of A Model With Several Regimes

Published online by Cambridge University Press:  17 August 2016

Patrick Artus  and
Pierre-Alain Muet
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Abstract

Usual approaches to the investment decision of the firm consider either that the firm is always constrained on its output sales or that it never faces any constraint at all. The paper is an attempt to enlarge this traditional framework in two directions. First by combining the two previous standpoints and by considering that the firm is sometimes constrained on its output (effective demand) and sometimes not constrained at all (notional demand); next by including other kinds of constraints as well, like a credit or a labor constraint. The outcome is a distinction between five possible «regimes», corresponding each to a different explanation of observed investment.

Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 50 , Issue 1-2 , 1984 , pp. 33 - 52
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1984 

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Footnotes

*

ENSAE.

**

OFCE.

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