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Capital operating time and economic fluctuations

Published online by Cambridge University Press:  17 August 2016

Martial Dupaigne
Martial Dupaigne*
Affiliation:
MAD, Université de Paris I, Maison des Sciences Économiques
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Summary

Acknowledging that changes in factor utilization rates explain variations in factor productive services flows, this paper investigates a dynamic general equilibrium model incorporating quasi-fixed inputs, weak complementarity between capital and labour, and displaying variations in the following three margins: (i) individual hours, (ii) aggregate employment and (iii) the workweek of capital. Both instantaneous amplification of shocks and mid-term persistence are substantially magnified, witnessing much richer propagation mechanisms. This high persistence does not entirely rely on assumptions regarding adjustment of employment, but, on the contrary, on faster capital accumulation enabled by large increases in output due to periods of high factor utilization.

Résumé

Résumé

De maniäre à expliquer l'évolution conjoncturelle des services productifs des facteurs par les variations de leurs taux d'utilisation, le modèle dynamique d'équilibre général étudié dans cet article décrit des facteurs de production quasi-fixes et faiblement complémentaires; il présente des variations aussi bien de l'horaire individuel de travail et la durée d'utilisation des équipements que de l'emploi total. Ces caractéristiques permettent d'enrichir considérablement le mécanisme de propagation des chocs, comme en témoignent l'amplification des réponses aux chocs et l'augmentation substantielle de la persistance de moyen terme. Cette persistence élevée ne s'explique pas uniquement par les hypothäses concernant l'ajustement de l'emploi, mais également par l'accumulation très rapide du capital durant les périodes d'utilisation intensive.

Keywords

E22E32E22E32
Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 64 , Issue 3 , 1998 , pp. 243 - 267
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1998 

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Footnotes

(*)

I thank P.-Y. Hénin and an anonymous referee for their suggestions, and F. Collard, F. Langot, M. Pucci and J-M. Talion for their valuable help. I am particularly indebted to X. Fairise. All remaining errors are mine.

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