The Neoclassical Theory of the Firm: A Note on the Production and Investment Decisions

1976 ◽  
Vol 9 (2) ◽  
pp. 331 ◽  
Author(s):  
Douglas D. Purvis
Keyword(s):  
Theory Of The Firm ◽  
Investment Decisions ◽  
Neoclassical Theory

scholarly journals Profitability, investment, and efficiency wages

2005 ◽  
Vol 2005 (4) ◽  
pp. 201-211 ◽  
Author(s):  
João Ricardo Faria
Keyword(s):  
General Framework ◽  
Investment Decisions ◽  
Efficiency Wages ◽  
Efficiency Wage ◽  
Neoclassical Theory ◽  
Intertemporal Efficiency ◽  
Turnover Costs ◽  
Intertemporal Choices

We examine a model that blends the neoclassical theory of investment with an intertemporal efficiency wage model with turnover costs. Investment decisions in capital are associated with the allocation of labor and the determination of efficiency wages. The model relates Tobin's q to efficiency wages and, in particular, to the Solow condition. It provides a general framework to analyze firm's intertemporal choices of capital, labor and efficiency wages.

Sign in / Sign up

Export Citation Format

Share Document