Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/211544
Authors: 
Tarkka, Juha
Willman, Alpo
Männistö, Hanna-Leena
Year of Publication: 
1989
Series/Report no.: 
Bank of Finland Discussion Papers 9/1989
Abstract: 
This report describes the determination of private consumption and investment in the BOF4 model. The consumption function of the model is largely based on thepermanent income hypothesis. Relative prices and the level of aggregate consumption determine the shares of the three consumption subgroups included in the aggregate. The non-residential investment equations are derived from the capital owners' intertemporal profit maximization problem in accordance with the neoclassical investment theory. Modelling of residential investment is based on Tobin's approach and that of inventories on the buffer stock-accelerator approach. The properties of the equations are illustrated by means of tables of dynamic elasticities throughout the paper.
Persistent Identifier of the first edition: 
ISBN: 
951-686-190-3
Document Type: 
Working Paper

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