Share
Finance and Economics Discussion Series: The 'Elusive' Capital-User Cost Elasticity Revisited
United States Federal Reserve Board
(Author)
·
Jonathan N. Millar
(Author)
·
Bibliogov
· Paperback
Finance and Economics Discussion Series: The 'Elusive' Capital-User Cost Elasticity Revisited - Millar, Jonathan N. ; United States Federal Reserve Board
Choose the list to add your product or create one New List
✓ Product added successfully to the Wishlist.
Go to My Wishlists
Origin: U.S.A.
(Import costs included in the price)
It will be shipped from our warehouse between
Thursday, July 25 and
Thursday, August 01.
You will receive it anywhere in United Kingdom between 1 and 3 business days after shipment.
Synopsis "Finance and Economics Discussion Series: The 'Elusive' Capital-User Cost Elasticity Revisited"
This paper sheds new light on the estimation of the long-run elasticity of the demand for business capital--for a measure that includes both equipment and structure--to changes in its user cost using a quarterly panel of two-digit manufacturing industries from South Africa from 1970 to 2000. For a variety of regression specifications, we find highly significant estimates of the user cost elasticity in the vicinity of -1.0 as implied by a Cobb-Douglas production function. These estimates contrast sharply with many previous studies that obtained small and/or statistically insignificant estimates of the user cost elasticity. This difference in findings may owe to the fact that the capital demand curve is better identified in a small open economy because shocks to capital supply are more likely to be exogenous. The economic embargo imposed on South Africa from 1985 to early 1994 temporarily forced its economy to become more closed and therefore provides a unique opportunity to assess the importance of identification in the estimation of the user cost elasticity. We find that the estimated magnitude of the user cost elasticity is considerably smaller over the embargo period. These findings suggest that the true elasticity is in the vicinity of the Cobb-Douglas benchmark, and that identification is important to uncovering this estimate.
- 0% (0)
- 0% (0)
- 0% (0)
- 0% (0)
- 0% (0)
All books in our catalog are Original.
The book is written in English.
The binding of this edition is Paperback.
✓ Producto agregado correctamente al carro, Ir a Pagar.
