Showing papers on "Physical capital published in 1991"
Book•
01 Nov 1991
TL;DR: The chaos and order in the capital markets is well known book in the world, of course many people will try to own it as mentioned in this paper, why don't you become the first? Still confused with the way?
Abstract: Why should wait for some days to get or receive the chaos and order in the capital markets book that you order? Why should you take it if you can get the faster one? You can find the same book that you order right here. This is it the book that you can receive directly after purchasing. This chaos and order in the capital markets is well known book in the world, of course many people will try to own it. Why don't you become the first? Still confused with the way?
541 citations
TL;DR: In this article, a model of household production is developed to study the cyclical allocation of capital and time between market and home activities, and the model is parameterized and simulated for the postwar U.S. economy.
Abstract: A Beckerian model of household production is developed to study the cyclical allocation of capital and time between market and home activities. The adopted framework treats the business and household sectors symmetrically. In the market, labor interacts with business capital to produce market goods and services, and likewise at home the remaining time (leisure) is combined with household capital to produce home goods and services. The model presented is parameterized and simulated to see whether it can rationalize the observed allocation of capital and time, as well as other stylized facts, for the postwar U.S. economy.
516 citations
TL;DR: In this article, the interplay between social and human capital in the income attainment process of managers is discussed, and a multivariate analysis of a 1986/1987 sample of 1359 top managers of larger companies in the Netherlands is presented.
456 citations
TL;DR: In this paper, a model of growth is developed in which finite-lived individuals invest in human capital, investments have a positive external effect on the human capital of later cohorts, and labor with more human capital produces higher quality goods.
Abstract: A model of growth is developed in which finite-lived individuals invest in human capital, investments have a positive external effect on the human capital of later cohorts, and labor with more human capital produces higher-quality goods. Stationary growth paths are analyzed, paths along which human capital and the quality of goods grow at a common, constant rate. It is also shown that if a small open economy is either very advanced or very backward relative to the rest of the world, then its rate of investment in human capital is lower under free trade than under autarky.
425 citations
TL;DR: In this article, an endogeneous growth model is developed that produces convergence in per capita income and growth rates of output, and explains income convergence of the developed world, regional income convergence within the United States, and intergenerational mobility.
Abstract: An endogeneous growth model is developed that produces convergence in per capita income and growth rates of output. Agents have identical preferences and access to identical technologies of production and investment, but differing levels of initial human capital. A spillover effect of human capital in the investment technology provides below-average human capital agents with a higher rate of return on investment than above-average human capital agents. Thus below-average human capital agents grow faster than above-average human capital agents. This model explains income convergence of the developed world, regional income convergence within the United States, and intergenerational mobility.
327 citations
Posted Content•
TL;DR: In this article, the authors evaluate and measure the contribution of public infrastructure capital on private sector output and productivity growth in Sweden by specifying and implementing empirically a number of alternative econometric models, using annual data for Sweden from 1960 to 1988.
Abstract: Our purpose in this paper is to examine how one might evaluate and measure the contribution of public infrastructure capital on private sector output and productivity growth in Sweden. We do this by specifying and implementing empirically a number of alternative econometric models, using annual data for Sweden from 1960 to 1988. Using a dual cost function approach, we find that increases in public infrastructure capital, ceteris paribus, reduce private sector costs. We compute that amount of public infrastructure capital that would rationalize the cost savings incurred by the private business and manufacturing sectors, and find that the amount that can be rationalized in this manner is less than what was in fact available in 1988, but that the extent of excess public infrastructure capital has been falling in the 1980's.
300 citations
TL;DR: In this paper, the marginal status of the body in sociology is challenged by examining the place of the physical in the production of social inequalities, and it is argued that a social analysis of body is central to understanding the reproduction of gender inequalities and that sociologists should take more seriously the multiple ways in which bodies enter into the construction of these inequalities.
Abstract: This paper seeks to challenge the marginal status of the body in sociology by examining the place of `the physical' in the production of social inequalities. After reviewing briefly Bourdieu's concept of embodied capital, I seek to extend his analysis by examining some recent work which looks at gender and the body-society relationship. It will be argued that a social analysis of the body is central to understanding the production of gender inequalities, and that sociologists should take more seriously the multiple ways in which bodies enter into the construction of social inequalities.
249 citations
Posted Content•
Abstract: No abstract is available for this paper.
216 citations
TL;DR: In this paper, the authors study the dynamics of growth and investment in a continuous time model with vintage capital, which is characterized by nonexponential rates of depreciation and technical change and can incorporate "gestation lags" as well as "learning by using".
201 citations
Book•
31 Mar 1991
TL;DR: In this paper, the authors present a model of the financial industry based on the Hessian model and show that it is possible to derive a Hessian-based profit function for financial firms.
Abstract: 1 Introduction and Summary.- 1.1 The Need for a Theory of Production for Financial Firms.- 1.2 Issues in Technology and Regulation.- 1.3 User Cost Derivation.- 1.4 A Model of the Financial Firm.- 1.5 Data and Data Construction.- 1.6 Specification and Hypothesis Testing.- 1.7 Empirical Results.- 2 Issues in Technology and Regulation of Financial Firms.- 2.1 Introduction.- 2.2 Cost Function Approach.- 2.2.1 Output Separability.- 2.2.2 Non-Joint Technology.- 2.3 Profit Function Approach.- 2.4 Outputs, Inputs, and the "Classification Problem".- 2.5 Regulations and the Financial Firm.- 2.5.1 Reserve Requirements.- 2.5.2 Interest Rate Ceilings.- 2.5.2.1 Deposit Interest Rate Ceilings.- 2.5.2.2 Loan Interest Rate Ceilings - Usary Laws.- 2.5.3 Deposit Insurance Premium Rates.- 2.6 Concluding Remarks.- 3 User Cost Derivation for Financial Firms.- 3.1 User Costs for Assets and Liabilities.- 3.2 Implementation Problems.- 3.2.1 Expectations of Future Prices.- 3.2.2 The Discounting Rate.- 3.2.3 Depreciation Rates.- 4 A Model of the Financial Firm.- 4.1 Introduction.- 4.2 An Intertemporal Production Model of the Individual Financial Firm.- 5 Data and Data Construction.- 5.1 Introduction.- 5.2 Labor Services.- 5.3 Materials Services.- 5.4 Physical Capital Services.- 5.5 User Costs for Financial Services.- 5.5.1 Assets.- 5.5.1.1 Introduction.- 5.5.1.2 Investments.- 5.5.1.3 Real Estate Mortgages.- 5.5.1.4 Installment Loans.- 5.5.1.5 Credit Card Loans.- 5.5.1.6 Commercial, Agricultural and Other Loans.- 5.5.1.7 User Cost for Aggregate Loans.- 5.5.1.8 Cash.- 5.5.2 Liabilities.- 5.5.2.1 Demand Deposits.- 5.5.2.2 Time Deposits.- 5.5.2.3 Non-Deposit Liabilities.- 5.5.2.4 Time Deposits and Borrowed Money.- 5.5.3 Financial Capital.- 5.6 Variable Profits.- 5.7 Concluding Remarks.- Appendix Functional Cost Data on Capital.- 6 Specification and Hypothesis Testing.- 6.1 Introduction.- 6.2 Profit Function and Net Supplies.- 6.3 Regularity Restrictions.- 6.4 Tests of Bank Technology.- 6.4.1 Introduction.- 6.4.2 Existence of Monetary Subaggregates.- 6.4.2.1 Introduction.- 6.4.2.2 Money Supply Definition: Cash and Demand Deposits.- 6.4.2.3 Money Supply Definition: Cash, Demand and Time Deposits.- 6.5 Econometric Issues.- 6.5.1 Exogeneity of Prices and Quantities.- 6.5.2 Pooling Time Series and Cross Section Data.- 6.5.2.1 Bank Effects.- 6.5.2.2 Branching Regulation Effects.- 6.5.2.3 Deregulation Effects.- 6.6 Concluding Remarks.- Appendix Derivation of Hessian - Variable Profit Function.- 7 Empirical Results.- 7.1 Introduction.- 7.2 Elasticities of Transformation, Demand and Supply.- 7.3 Regularity Tests.- 7.4 Estimation of Transformation, Supply and Demand Elasticities.- 7.5 Rate of Return on Capital.- 7.6 Policy Implications: Monetary Policy and Bank Behavior.- 7.6.1 Introduction.- 7.6.2 Interest Rate Effects.- 7.6.3 Reserve Requirement Costs.- 7.6.4 Deposit Insurance - FDIC Regulation.- 7.7 Tests of Monetary Aggregation.- 7.8 Concluding Remarks.
127 citations
TL;DR: In this paper, the irreversibility of investment in physical capital together with the anticipation of receiving information and learning the state of demand lead to lower investment levels than otherwise since the firm cannot disinvest if market conditions turn out to be less favourable than currently anticipated.
Abstract: In this paper, we consider a risk-neutral competitive firm which is uncertain about the true state of demand. We build upon Arrow by demonstrating that the irreversibility of investment in physical capital together with the anticipation of receiving information and of learning the state of demand lead to (1) cautious investment behaviour and hence, to lower investment levels than otherwise since the firm cannot disinvest if market conditions turn out to be less favourable than currently anticipated; (2) a time-varying risk premium, or marginal "adjustment cost" which is shown to arise endogenously and to be positively related to the investment level and to the anticipation of greater information in the sense of Blackwell (1951, 1953); (3) a gradual adjustment of the capital stock to the desired level, defined as the optimal capital stock corresponding to the true state of demand.
Book•
01 Jan 1991
TL;DR: In this paper, the Marxian variables for the postwar US economy: rate of surplus-value, technical composition of capital, organic composition, distribution of capital across industries turnover time of capital multiple shifts rate of profit comparison with Weisskopf's estimates comparison with Wolff's estimates estimates of the Marxians variables, 1977-87.
Abstract: Part 1 Marx's theory of the falling rate of profit: increase in the composition of capital? - definition of the composition of capital theory of the tendency to increase composition of capital increase faster than the rate of surplus-value? - Marx's argument formal model with a constant real wage formal model with an increasing real wage Okishio's theorem - the theorem, criticisms, evaluation. Part 2 Conceptual issues in the estimation of the Marxian variables: money or labour units non-capitalist production non-production capital (productive labour/unproductive labour) residential housing taxes on wages recent criticisms of Marx's concepts of productive labour and unproductive labour. Part 3 Estimates of the Marxian variables for the postwar US economy: rate of surplus-value - composition of capital technical composition of capital value composition of capital organic composition of capital distribution of capital across industries turnover time of capital multiple shifts rate of profit comparison with Weisskopf's estimates comparison with Wolff's estimates estimates of the Marxian variables, 1977-87. Part 4 The decline of the conventional rate of profit: "profit squeeze" explanations Weisskopf - "rising strength of labour" Wolff - "slower productivity growth" summary Marxian explanation - Marxian theory of the conventional rate of profit estimates of the Marxian determinants share of profit empirical test. Part 5 The causes of the increase of unproductive labour: detailed estimates of unproductive labour commercial labour financial labour finance insurance and real estate supervision labour - causes of increases effects of increase conclusions. Part 6 Conclusion: main conclusions further research future trends limits of government policies. Appendices: detailed estimates sources and methods assessment of bias.
TL;DR: In this paper, the consequences of increased foreign capital for an economy with unemployment are analyzed under different assumptions that influence the relative oportunity costs of domestic labor, and the authors suggest that the implications of the literature on the welfare effect of increased Foreign capital are misleading.
Abstract: The consequences of increased foreign capital for an economy with unemployment are analyzed under different assumptions that influence the relative oportunity costs of domestic labor. The investigation suggests that the implications of the literature on the welfare effect of increased foreign capital are misleading. The paper shows that welfare gains result from increased foreign capital if the opportunity costs of labor are sufficiently low relative to the wages earned by laborers employed by new foreign capital. A number of cases where this occurs are presented. The findings of the paper suggest that cases where increased foreign capital must be welfare-harming represent extreme parameterizations in the set of possibilities. Copyright 1991 by The London School of Economics and Political Science.
TL;DR: In this article, the efficiency of quantity restrictions on capital exports and the accompanying set of taxes is examined and an efficient allocation of domestic savings between foreign and domestic investment is obtained, and it is shown that when the government cannot tax foreign source income it is optimal to impose such a restriction so as to induce overinvestment in domestic capital.
Book•
01 Oct 1991
TL;DR: In this paper, a self-contained introduction offers an essential perspective on the understanding of capital investment decisions, beginning by studying analytical techniques based on simplifying assumptions, these restrictions are gradually relaxed to introduce more complex elements from professional practices.
Abstract: This self-contained introduction offers an essential perspective on the understanding of capital investment decisions. Beginning by studying analytical techniques based on simplifying assumptions, these restrictions are gradually relaxed to introduce more complex elements from professional practices.
TL;DR: In this paper, a model of urban capital markets in which credit is allocated among risky investment projects in cities of various sizes is presented, and the default value of a project depends on the second best use of its assets, and this is expected to be more valuable in large cities.
Posted Content•
TL;DR: In this paper, a survey was designed in an attempt to gauge the relevance of several theories of capital structure, including tax factors and management preferences, on capital structure choices and preferences in small-growing corporations.
Abstract: Capital structure choices and preferences in small, rapidly growing corporations are examined. As much of capital structure theory involves variables not easily or practically quantified (e.g., preferences, motivations, agency costs, information asymmetries) a survey was designed in an attempt to gauge the relevance of several theories of capital structure. The survey was sent to 405 firms, taken from lists of successful high growth corporations; 27.2% returned usable responses. Analysis of the responses indicates that tax factors and management preferences have major impacts on capital structure. Implications arising from agency cost, information asymmetry, and signaling theory apparently have little impact on capital structure choice and financing strategies of the responding firms.
TL;DR: In this paper, the authors employ the second approach in a times series study of capital mobility among OECD countries, which assesses the mobility of groups of financial assets which represent the existing capital stock while the latter actually scrutinizes the movement of new physical capital.
Abstract: Historically investigations of the international mobility of capital have studied rates of return on similar assets denominated in different currencies. Recently, however, efforts directed at ascertaining the degree of international capital mobility have examined the relationship between domestic saving and investment rates. The first approach assesses the mobility of groups of financial assets which represent the existing capital stock while the latter actually scrutinizes the mobility of new physical capital. This paper employs the second approach in a times series study of capital mobility among OECD countries. Implementation of four different tests of the saving-investment relationship suggest that physical capital is more mobile than previous studies have indicated.
TL;DR: In this article, the authors provide a counterexample to some recent results of Grout and others which state that in a bargaining situation without binding wage agreements, the capital stock will be biased downwards.
01 Jan 1991
TL;DR: In the late 1920s and early 1930s, when Sir John Hicks was a young scholar at the London School of Economics, there was growing interest in the prospect of an equilibrium approach to the study of business cycles.
Abstract: In the late 1920s and early 1930s, when Sir John Hicks was a young scholar at the London School of Economics, there was growing interest in the prospect of an equilibrium approach to the study of business cycles. In 1931, Hayek gave the LSE lectures that were to become Prices and Production, a first attempt to use Austrian capital theory to study aspects of economic fluctuations. Next, in one of his earliest published papers, ‘Equilibrium and the Cycle’, written in 1932, Hicks made two key observations about the developing equilibrium approach.
01 Sep 1991
TL;DR: In this article, a dynamic stochastic model of a small open economy is used to quantify the macroeconomic effects of a policy that utilizes capital controls as an instrument to target the trade balance.
Abstract: A dynamic stochastic model of a small open economy is used to quantify the macroeconomic effects of a policy that utilizes capital controls as an instrument to target the trade balance. The results show that, given the magnitude of actual business cycles, capital controls have negligible effects on agents' ability to smooth consumption and the level of welfare. These surprising results suggest that the benefits obtained from free trade as a mechanism that facilitates consumption smoothing are of secondary importance. A fiscal strategy that enforces capital controls by taxing foreign interest income is also studied.
TL;DR: In this paper, the authors surveyed the literature on whether the cost of capital is low in Japan and concluded that the costs of finance were indeed lower in Japan in the 1980s than in the United States, by a variety of measures.
Abstract: The extensive literature on whether the cost of capital is low in Japan is surveyed in this paper. Along the way, it considers: the leverage of Japanese firms, dividend payout, equity price/earnings ratios, corporate taxation, cross-ownership, land price/rental ratios, speculative bubbles, the household saving rate, international capital mobility, the lower cost of financing investment internally and through "main bank" relationships, and the move to a more market-oriented system as these relationships break down. The conclusion that emerges from the literature is that the cost of finance was indeed lower in Japan in the 1980s than in the United States, by a variety of measures. But trends of domestic and international liberalization, followed by the events of 1990, have now raised the cost of capital in Japan to the U.S. market level.
TL;DR: In this article, the authors deal with recent developments of computable general equilibrium (CGE) models along two important dimensions: (1) the incorporation of intertemporal aspects of decision-making, and (2) the treatment of international capital flows.
Abstract: This paper deals with recent developments of computable general equilibrium (CGE) models along two important dimensions: (1) the incorporation of intertemporal aspects of decision-making, and (2) the treatment of international capital flows. The two dimensions are closely related, since intertemporal choices — in particular saving and investment decisions — directly influence the flows of capital between economies that are integrated in world financial markets.
TL;DR: In this paper, the authors give a comprehensive empirical survey of private capital flight from developing countries and find that changes in the expected relative rate of return on assets between the foreign and domestic market are a major cause of capital flight.
Abstract: This paper seeks to give a comprehensive empirical survey of private capital flight from developing countries. First, three alternative calcualtions of net private capital outflows are presented for 22 developing countries during 1978–85. It turns out that several of these countries had experienced major capital flight. Second, using an economtric model which combines time series and cross-section data, a portfolio model is estimated in order to find some of the reasons for capital flight. Third, on quarterly time series capital flight from Mexico is determined in a time jseries model. This analysis gives further insight into the causes of capital flight. The overall result from both studies is that changes in the expected relative rate of return on assets between the foreign and domestic market are a major cause of capital flight.
TL;DR: The authors analyzes the demand for labor, capital, and energy in the U.S. food-manufacturing industry using Allen and Morishima elasticities of substitution, showing that demand for capital is more elastic than for labor and energy and these production factors are substitutable, especially between capital and labor.
Abstract: This paper analyzes the demand for labor, capital, and energy in the U.S. food‐manufacturing industry using Allen and Morishima elasticities of substitution. The demand for capital is more elastic than for labor and energy, and these production factors are substitutable, especially between capital and labor.
Posted Content•
Book•
01 Jun 1991
TL;DR: In this article, a risk-free model for investment portfolio theory is proposed for investment in financial management market efficiency, and an assessment and a projection of the cost of capital and capital structure is given.
Abstract: Part 1 Introduction and framework: the finance situation in the organization and society the securities markets in financial management market efficiency. Part 2 Investment: a risk-free model for investment portfolio theory enter the enterprise - the risk-free model the capital asset pricing model. Part 3 Markets and other financial decisions: medium- and long-term financing short-term financing and lending dividend policy cost of capital and capital structure. Part 4 Overview and summary: an assessment and a projection. Part 5 Workbook: the finance function in the organization and society securities markets in financial management market efficiency a risk-free model for investment enter the enterprise - the risk-free model portfolio theory the capital asset pricing model medium- and long-term financing short-term financing and lending dividend policy cost of capital and capital structure an assessment and a projection.
TL;DR: In this article, a time-state-preference valuation model was used to examine how a firm's choice of technology and production method affects its equilibrium level of risk and, as a result, the firm's cost of capital.
Abstract: This paper uses a time-state-preference valuation model to examine how the firm's choice of technology and production method affects its equilibrium level of risk and, as a result, the firm's cost of capital. A fixed and flexible method of production is analyzed for a firm using a Cobb-Douglas production function. In both cases, it is found that risk and the cost of capital decrease with the level of capital intensity. Implications are drawn for the specification of empirical tests of the determinants of risk.
TL;DR: In this article, the effects of a tax reform of conversion from capital income to consumption taxes on capital accumulation in a two-country model were investigated in the territorial system and the residence system.
Abstract: This paper investigates the effects of a tax reform of conversion from capital income to consumption taxes on capital accumulation in a two-country model. In the territorial system, the tax reform will normally lead to a negative comovement between capital accumulation in two countries, while in the residence system it will lead to a positive comovement. Copyright 1991 by Royal Economic Society.
TL;DR: In this paper, the authors present empirical research on physical capital, industrial diversification, and human capital developments in arms-producing and non-arms producing developing nations from the mid 1970s to the mid 1980s.
Abstract: This paper presents empirical research on physical capital, industrial diversification, and human capital developments in arms‐producing and non‐arms producing developing nations from the mid‐1970s to the mid‐1980s. Drawing on data from the United Nations and the World Bank, a close relation between arms production potential and actual arms production is found which evokes concern about policy‐directions for successful arms control in the third world. The paper closes with brief reflections on third world arms production incentives.