Dynamic Factor Demand in a Rationing Context

I Theory.- 1 Disequilibrium models.- 1.1 Recent developments in Keynesian macroeconomics.- 1.2 Microfoundations of wage and price rigidity.- 1.2.1 The rigidity of prices.- 1.2.2 The stickiness of wages.- 1.2.3 Theories of wage and price change.- 1.3 Fix-price models.- 1.4 Dynamic factor demand.- 1.4.1 Theoretical and empirical work on adjustment costs.- 1.4.2 Specification of adjustment costs.- 1.4.3 The role of time for adjustment.- 2 The basic model.- 2.1 Assumptions.- 2.1.1 Wages, prices, and capital costs.- 2.1.2 The concept of micro-markets.- 2.1.3 The dynamic decision structure.- 2.2 The optimization program of the firm.- 2.2.1 Output.- 2.2.2 Employment.- 2.2.3 The investment decision.- 2.2.3.1 The optimal capital stock.- 2.2.3.2 The derivation of the optimal capital-labour ratio.- 2.3 Regimes on the goods and labour market.- 2.4 Appendix A.- 2.5 Appendix B: list of symbols.- 3 Extensions of the basic model.- 3.1 Overtime working.- 3.2 Dynamic input adjustment.- 3.2.1 Dynamic adjustment of employment.- 3.2.2 Investment and capital-labour substitution.- 3.3 Endogenous wages and prices.- 4 The aggregation of micro-markets.- 4.1 The distribution of micro-markets.- 4.2 Derivation of the CES-property.- 4.3 The quality of the CES-approximation.- II Empirical estimation.- 5 Specification of the model.- 5.1 The recursive structure.- 5.2 The treatment of expectations.- 5.3 The choice of technique.- 5.4 Calculation of demand - the trade equations.- 5.5 Estimation of the minimum conditions.- 5.5.1 Determination of output.- 5.5.2 Labour demand and employment.- 5.6 The demand for capital.- 5.7 Appendix C: data sources and definitions.- 6 Results.- 6.1 Capital-labour substitution.- 6.2 Trade.- 6.3 Output and overtime working.- 6.4 Employment.- 6.5 Capital formation.- Conclusion.