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Q Investment Models, Factor Complementarity and Monopolistic Competition

Omar Licandro
Recherches Économiques de Louvain / Louvain Economic Review
Vol. 58, No. 1 (1992), pp. 51-73
Stable URL: http://www.jstor.org/stable/40723976
Page Count: 23
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Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Q Investment Models, Factor Complementarity and Monopolistic Competition
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Abstract

La plupart des modèles standard de comportement optimal pour les firmes ne permettent pas de tenir compte du fait (observé) que les firmes investissent même si leurs capacités sont sous-utilisées. Dans cet article, le modèle d'investissement q est adapté à une économie en concurrence imparfaite, où la firme représentative est confronté à une demande incertaine. On impose des rigidités nominales et une complémentarité à court terme des facteurs comme conditions suffisantes pour que coexistent investissement et capacités excédentaires. On montre alors que, puisque les capacités sont sous-employées, le q marginal diffère du q moyen. Enfin, l'excès de capacités n'est pas qu'un phénomène de court terme mais subsiste à l'équilibre de long terme. The observed fact that firms invest even if capacities are not fully employed does not fit into most standard formalizations of optimal firm behaviour. In this paper, the q investment approach is adapted to an imperfect competitive economy where the representative firm is assumed to face demand uncertainty. Nominal rigidities and short-run factor complementarity are imposed as sufficient conditions to allow for the coexistence of investment and excess capacity. Since capacities are underemployed, marginal q is shown to diverge from average q. Finally, excess capacity subsists at steady state being more than a short-run phenomena.

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