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Time-to-build and the capital structure

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  • Bambi, Mauro

Abstract

Calibrating the time-to-build parameter in one-sector models is non-trivial because capital includes plant, equipment, etc. having different gestation lags. This issue is clarified by explaining when the long-run dynamics of these models matches that of a more realistic multi-sector counterpart.

Suggested Citation

  • Bambi, Mauro, 2015. "Time-to-build and the capital structure," Economics Letters, Elsevier, vol. 137(C), pages 222-225.
    • Handle: RePEc:eee:ecolet:v:137:y:2015:i:c:p:222-225
    DOI: 10.1016/j.econlet.2015.11.012
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    References listed on IDEAS

    as
    1. Asea, Patrick K. & Zak, Paul J., 1999. "Time-to-build and cycles," Journal of Economic Dynamics and Control, Elsevier, vol. 23(8), pages 1155-1175, August.
    2. Fabrice Collard & Omar Licandro & Luis A. Puch, 2008. "The short-run Dynamics of Optimal Growth Model with Delays," Annals of Economics and Statistics, GENES, issue 90, pages 127-143.
    3. Mauro Bambi, 2006. "Endogenous Growth and Time-to-Build: the AK Case," Economics Working Papers ECO2006/17, European University Institute.
    4. Rouwenhorst, K. Geert, 1991. "Time to build and aggregate fluctuations : A reconsideration," Journal of Monetary Economics, Elsevier, vol. 27(2), pages 241-254, April.
    5. M. Bambi & G. Fabbri & F. Gozzi, 2012. "Optimal policy and consumption smoothing effects in the time-to-build AK model," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 50(3), pages 635-669, August.
    6. Kydland, Finn E & Prescott, Edward C, 1982. "Time to Build and Aggregate Fluctuations," Econometrica, Econometric Society, vol. 50(6), pages 1345-1370, November.
    7. repec:adr:anecst:y:2008:i:90:p:05 is not listed on IDEAS
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    More about this item

    Keywords

    Heterogeneous time-to-builds; Long-run dynamics; Ramsey and AK model;
    All these keywords.

    JEL classification:

    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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