A qualitative response analysis of UK firms' employment and output decisions

Journal of Applied Econometrics - Tập 4 Số 3 - Trang 251-264 - 1989
James McIntosh1, Fabio Schiantarelli2, William Low3
1Economics Department, Concordia University, 1455 De Maisonneuve Blvd. W., Montreal, Quebec, H3G 1M8, Canada
2Economics Department, Boston University, 270 Bay State Rd, Boston, MA. 02215, U.S.A.
3Economics Department, Brunel University, Uxbridge, Middlesex UB8 3PH, UK

Tóm tắt

AbstractThis paper investigates firms' employment and output decisions and presents some empirical evidence concerning the rationality of firms' expectations. The dymanic model is based on the assumptions of convex adjustment costs and monopolistic competition in the product market. The results are obtained using categorical information on individual firms contained in business surveys collected by the Confederation of British Industry. Ordered probit models are used to estimate the employment and output equations. We find that expected demand is a critical determinant of firms' decisions, the effect of changes in cost conditions is not as well determined, and the data are not consistent with the rational expectations hypothesis.

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Thông tin xuất bản

Journal of Applied Econometrics

Tập 4 Số 3

251-264

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