Theoretical and Applied Economics
No. 2 / 2018 (615), Summer
An implicit model of adjustment costs in differential input demand systems
University of Florida, USA
Abstract. This study provides a theoretical framework for implicitly accounting for adjustment costs in differential systems of factor demand relationships. Differential factor demand relationships, as they are represented by parameters of the cost function, are generally assumed to be linear in the parameters in the existing empirical literature. I argue that this linearity might not always hold because firms may incur adjustment costs that are inherent in the act of adjusting the mix of inputs applied in the underlying production technologies. Implications of convex and nonconvex adjustment costs for estimating differential systems as well as price and substitution elasticities are explored.
Contents
Studying banking performance from an accounting perspective: Evidence from Europe
Corruption, governments’ debts, trade, and global growth
Innovation – trends and patterns at Romanian firms
How to build an economy free of recession and stagnation: results from a multi-commodity macro model
Analyzing the employment rate of the population, unemployment and vacancies in the economy
An implicit model of adjustment costs in differential input demand systems
Diversity and proportionality, challenges or opportunities for the European banking sector?
A competitive economy as the path to future prosperity: Comparative analysis of selected European countries
Studying the political economy of reforms: The Greek case, 2010-2017
Analysis of the evolution of the number of pensioners and pensions in Romania
Inflation unemployment dynamics in Hungary – A structured cointegration and vector error correction model approach
Are defence expenditures the reasons of foreign debts in Turkey?
Exports, imports and economic growth in India: Evidence from cointegration and causality analysis
The role of economic growth and energy consumption on CO2 emissions in E7 countries
Which comes first – savings or growth? Time series evidence from ECOWAS countries