scholarly journals Measuring TFP: The Role of Profits, Adjustment Costs, and Capacity Utilization

2020 ◽  
Author(s):  
Diego Comin ◽  
Javier Quintana Gonzalez ◽  
Tom Schmitz ◽  
Antonella Trigari
Keyword(s):  
Capacity Utilization ◽  
Adjustment Costs

INDETERMINACY IN CASH-IN-ADVANCE MODELS AND THE ROLE OF FRICTIONS

2009 ◽  
Vol 14 (1) ◽  
pp. 119-135 ◽  
Author(s):  
Koray Akay
Keyword(s):  
Habit Formation ◽  
Capacity Utilization ◽  
Adjustment Costs ◽  
New Keynesian ◽  
Elasticity Of Substitution ◽  
Variable Capacity ◽  
Model Features ◽  
Real Indeterminacy ◽  
Cash In Advance

A monetary cash-in-advance model is known to be prone to real indeterminacy if the intertemporal elasticity of substitution in consumption is sufficiently low. Moreover, if the model features habit formation in consumption, the scope of indeterminacy increases substantially. This paper shows that many of the nominal frictions and real rigidities commonly used in the New Keynesian paradigm act to decrease the scope of this indeterminacy. These frictions include stickiness in prices and wages, adjustment costs in investment, and variable capacity utilization. When they are all used together in the model, the problem of indeterminacy nearly vanishes, even when habit formation in consumption is allowed.

Measuring TFP: The Role of Profits, Adjustment Costs, and Capacity Utilization

2020 ◽  
Author(s):  
Diego Comin ◽  
Javier Quintana ◽  
Tom Schmitz ◽  
Antonella Trigari
Keyword(s):  
Capacity Utilization ◽  
Adjustment Costs

Energy Markets and Trading

2018 ◽  
Author(s):  
David Mares
Keyword(s):  
Fossil Fuels ◽  
Negative Impact ◽  
Adjustment Costs ◽  
Institutional Context ◽  
Energy Markets ◽  
Energy Resources ◽  
Trade Offs ◽  
The Social ◽  
Impact Risk

This chapter discusses the role of energy in economic development, the transformation of energy markets, trade in energy resources themselves, and the geopolitical dynamics that result. The transformation of energy markets and their expansion via trade can help or hinder development, depending on the processes behind them and how stakeholders interact. The availability of renewable, climate-friendly sources of energy, domestically and internationally, means that there is no inherent trade-off between economic growth and the use of fossil fuels. The existence of economic, political, social, and geopolitical adjustment costs means that the expansion of international energy markets to incorporate alternatives to oil and coal is a complex balance of environmental trade-offs with no solutions completely free of negative impact risk. An understanding of the supply of and demand for energy must incorporate the institutional context within which they occur, as well as the social and political dynamics of their setting.

scholarly journals The Role of Trading Frictions in Real Asset Markets

2011 ◽  
Vol 101 (4) ◽  
pp. 1106-1143 ◽  
Author(s):  
Alessandro Gavazza
Keyword(s):  
Empirical Analysis ◽  
Capacity Utilization ◽  
Asset Markets ◽  
Asset Market ◽  
Commercial Aircraft ◽  
Average Productivity ◽  
Thin Market ◽  
Asset Allocations ◽  
The Empirical Analysis

This paper investigates how trading frictions vary with the thickness of the asset market by examining patterns of asset allocations and prices in commercial aircraft markets. The empirical analysis indicates that assets with a thinner market are less liquid—i.e., more difficult to sell. Thus, firms hold on longer to them amid profitability shocks. Hence, when markets for assets are thin, firms' average productivity and capacity utilization are lower, and the dispersions of productivity and of capacity utilization are higher. In turn, prices of assets with a thin market are lower and have a higher dispersion. (JEL A12, L11, L93)

Servitization and business performance: the moderating effects of environmental uncertainty

2019 ◽  
Vol 35 (5) ◽  
pp. 803-815 ◽  
Author(s):  
Ying Zhang ◽  
Longwei Wang ◽  
Jie Gao ◽  
Xin Li
Keyword(s):  
Business Performance ◽  
Demand Uncertainty ◽  
Adjustment Costs ◽  
Manufacturing Firm ◽  
Content Type ◽  
Technological Turbulence ◽  
Coordination Costs ◽  
Benefits And Costs ◽  
Moderating Role

Purpose To obtain in-depth explanations of the effects of servitization, this paper aims to analyse the benefits and costs at different servitization levels. The authors also investigate the moderating roles of demand uncertainty and technological turbulence on such effects. Design/methodology/approach The authors use the resource-based view (RBV) and transaction cost economics (TCE) to analyse the varying benefits and costs associated with servitization at its different levels and proposes the hypotheses. Then they use the survey data of 239 Chinese manufacturing firms to empirically test these hypotheses. Findings The interplay among service benefits, adjustment costs and coordination costs results in a nonlinear relationship between servitization and business performance. A negative servitization–performance relationship is observed at low levels of servitization as adjustment costs would be dominant. At moderate servitization levels, a positive relationship is observed because service benefits increase substantially and outweigh the increase in adjustment and coordination costs. As servitization levels further increase, coordination costs become dominant and a negative servitization–performance relationship reappears. The study further shows the significant moderating role of demand uncertainty and the insignificant moderating role of technological turbulence. Research limitations/implications This study provides a nuanced understanding of the curvilinear effects of servitization on business performance in response to the calls for detailed insights from quantitative studies. Practical implications The findings provide guidance on the degree to which the manufacturing firm should extend its service businesses based on demand and technological environments. Originality/value This is one of the pioneering empirical studies applying RBV and TCE to examine the varying benefits and costs across different servitization levels. The findings provide insight into the ongoing discussion about “service paradox” and “deservitization”.

Innovations in Law

2020 ◽  
pp. 317-347
Author(s):  
B. Zorina Khan
Keyword(s):  
Common Law ◽  
Adjustment Costs ◽  
The United States ◽  
Legal Rules ◽  
Disruptive Technologies ◽  
Socioeconomic Changes ◽  
Long Run ◽  
Short Run ◽  
The Common

Administered systems involve regulation, while efficient markets in ideas require secure property rights and appropriate adjacent institutions. Disruptive technologies typically lead to institutional bottlenecks, which then require accommodations in legal rules and their enforcement. U.S. policy toward innovation and enterprise has always been distinguished by the central role of law and the judiciary. The evolution of legal rules and standards in the United States reveals a remarkable degree of flexibility and responsiveness to innovations. In the short run, the common law economized on legal adjustment costs through “adjudication by analogy,” whereas, in the long run, socioeconomic changes wrought by major inventions ultimately produced more fundamental adjustments in adjacent institutions. This institutional elasticity can be contrasted with the lack of transparency and rigidity that characterized most administered innovation institutions.

The role of inventories and capacity utilization as shock absorbers

2014 ◽  
Vol 17 (1) ◽  
pp. 70-85 ◽  
Author(s):  
Leonardo Auernheimer ◽  
Danilo R. Trupkin
Keyword(s):  
Capacity Utilization ◽  
Shock Absorbers

scholarly journals The role of intratemporal adjustment costs in a multisector economy

1999 ◽  
Vol 43 (2) ◽  
pp. 317-350 ◽  
Author(s):  
Gregory W. Huffman ◽  
Mark A. Wynne
Keyword(s):  
Adjustment Costs

scholarly journals THE ROLE OF INVESTMENT-SPECIFIC TECHNOLOGY SHOCKS IN DRIVING INTERNATIONAL BUSINESS CYCLES: A BAYESIAN APPROACH

2016 ◽  
Vol 21 (3) ◽  
pp. 555-598 ◽  
Author(s):  
Jaya Dey
Keyword(s):  
Bayesian Approach ◽  
Negative Correlation ◽  
Marginal Likelihood ◽  
Capacity Utilization ◽  
Adjustment Costs ◽  
Wealth Effects ◽  
International Business Cycles ◽  
Variable Capacity ◽  
Specific Technology ◽  
Country Specific

This paper uses a Bayesian approach to estimate a standard international real business cycle model augmented with preferences with zero wealth effect, variable capacity utilization, and investment adjustment costs. First, I find that the bulk of fluctuations in country-specific outputs, consumption, investments, and international relative prices can be attributed to country-specific neutral technology, investment-specific technology, and preference shocks. Second, my estimated model with economically meaningful shocks simultaneously accounts for the negative correlation between the real exchange rate and relative consumption and the negative correlation between the terms of trade and relative output. Last, through a marginal likelihood comparison exercise, I find that the success of the model depends on preferences with zero wealth effects; other frictions and alternative asset market structures play a less important role.

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