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Fiscal policy, entry and capital accumulation : Hump-shaped responses
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Autores
Orientador(es)
Resumo(s)
In this paper we consider the entry and exit of firms in a Ramsey model with capital and an endogenous labour supply. At the firm level, there is a fixed cost combined with increasing marginal cost, which gives a standard U-shaped cost curve with optimal firm size. The costs of entry (exit) are quadratic in the flow of new firms. The number of firms becomes a second state variable and the entry dynamics gives rise to a richer set of dynamics than in the standard case: in particular, there is likely to be a hump shaped response of output to a fiscal shock with maximum effect after impact and before steady state is reached. Output and capital per firm are also likely to be hump shaped.
Descrição
Palavras-chave
Entry Ramsey Fiscal Policy Macroeconomic Dynamics
Contexto Educativo
Citação
Brito, Paulo and Huw Dixon .(2013). “Fiscal policy, entry and capital accumulation : Hump-shaped responses”. Journal of Economic Dynamics and Control, Volume 37, Issue 10: pp. 2123-2155 . (Search PDF in 2024).
Editora
Elsevier