de la Croix, David
[UCL]
Licandro-Goldaracena, Omar
[UCL]
This paper evaluates the relevance of q theories under stochastic demand and capacity constraints by estimating an investment function for the Belgian economy. Under these theoretical conditions, we find that the investment rate depends on average q and on the expectations about the degree of capacity utilisation. The dynamics of the empirical model is derived without using any " time to build " or " delivery lags " assumptions. Our estimation stresses how important are the expectations about the degree of capacity utilisation in explaining investment.
Bibliographic reference |
de la Croix, David ; Licandro-Goldaracena, Omar. Investment Under Demand Uncertainty and Capacity Constraints : An Empirical Application to Belgium. Econ Working Paper ; 9010 (1990) 29 pages |
Permanent URL |
http://hdl.handle.net/2078.1/75992 |