• Medientyp: E-Book
  • Titel: Long-Run Investment under Uncertain Demand
  • Beteiligte: Di Corato, Luca [Verfasser:in]; Moretto, Michele [Sonstige Person, Familie und Körperschaft]; Vergalli, Sergio [Sonstige Person, Familie und Körperschaft]
  • Erschienen: [S.l.]: SSRN, [2013]
  • Erschienen in: FEEM Working Paper ; No. 65.2013
  • Umfang: 1 Online-Ressource (14 p)
  • Sprache: Englisch
  • DOI: 10.2139/ssrn.2294463
  • Identifikator:
  • Entstehung:
  • Anmerkungen: Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments July 16, 2013 erstellt
  • Beschreibung: In the literature investigating the impact of uncertainty on short-run and long-run investment, most authors have used a log linear profit function. This functional form has been generally considered a reasonable approximation for more general ones and has the advantage of providing closed form solutions for both short-run investment rule and long-run rate of capital accumulation. In this paper, we consider a firm facing a linear demand function with additive shocks and present a technique for the analytical approximation of the long-run average rate of capital accumulation for the case of an inverted U-shape profit function. We then compare the long-run rates of capital accumulation calculated under both assumptions within a plausible range of parameter values. We notice significant differences and conclude that the choice of a log linear functional form has a non-trivial impact on the magnitude of the long run rate of capital accumulation
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