Title
Quasi-fixed inputs and long-run equilibrium in production: A cointegration analysis
Abbreviated Journal Title
J. Appl. Econom.
Keywords
ECONOMIC CAPACITY UTILIZATION; TIME-SERIES REGRESSION; ASYMPTOTIC; PROPERTIES; MODELS; TESTS; HYPOTHESIS; VECTORS; COST; SPECIFICATION; DEMAND; Economics; Social Sciences, Mathematical Methods
Abstract
This paper proposes a cointegration approach to testing the validity long-run equilibrium in production, where capital and labour are taken as quasi-fixed inputs. Previous studies consider only capital as the quasi-fixed input and do not take account of the time series properties of the variables, assuming implicitly that they are stationary. The canonical cointegrating regressions (CCR) procedure is employed to test for cointegration in both the single-equation and the seemingly unrelated regressions framework, and long-run equilibrium conditions are tested. The evidence from US manufacturing reveals that capital and labour are not fully adjusted to their long-run optimal values, casting doubt on the long-run equilibrium hypothesis. Copyright (C) 2001 John Wiley & Sons, Ltd.
Journal Title
Journal of Applied Econometrics
Volume
16
Issue/Number
1
Publication Date
1-1-2001
Document Type
Article
DOI Link
Language
English
First Page
41
Last Page
57
WOS Identifier
ISSN
0883-7252
Recommended Citation
"Quasi-fixed inputs and long-run equilibrium in production: A cointegration analysis" (2001). Faculty Bibliography 2000s. 8066.
https://stars.library.ucf.edu/facultybib2000/8066
Comments
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