Diskussionsbeiträge: Serie II, Sonderforschungsbereich 178 "Internationalisierung der Wirtschaft", Universität Konstanz 175
A dynamic model of the firm is worked out, which pays special attention to a delayed adjustment of employment, investment, and the production technology. A three-step decision structure is assumed, with short-run adjustment of output, medium-run adjustment of employment, and long-run adjustment of the capital stock and capital-labour substitution. Special attention is paid to dynamic inefficiencies like underutilizations of the capital stock and labour hoarding. Market disequilibrium is introduced by allowing for a sluggish adjustment of wages and prices. The model of the firm is complemented by explicit aggregation over firms. The aggregate model is estimated for the FRG.
Disequilibrium macroeconomic model aggregation micro market dynamic labour demand investment rationing model