IDEAS home Printed from https://ideas.repec.org/p/ags/aaea86/278110.html
   My bibliography  Save this paper

Technical Change, Uncertainty And Investment

Author

Listed:
  • Stefanou, Spiro E.

Abstract

The expected investment dynamics of the risk-neutral firm is examined in the presence of uncertainty in the future evolution of the real wage and the stock of technical knowledge. A model of the adjustment cost firm is developed that is characterized by quasi-fixed, factor-augmenting technical change that is taken exogenously by the firm. The effect of wage and technical change uncertainty on investment behavior is assessed using comparative stochastic dynamic analysis.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Stefanou, Spiro E., 1986. "Technical Change, Uncertainty And Investment," 1986 Annual Meeting, July 27-30, Reno, Nevada 278110, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea86:278110
    DOI: 10.22004/ag.econ.278110
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/278110/files/aaea-1986-071.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.278110?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Quirino Paris & Christopher D. Easter, 1985. "A Programming Model with Stochastic Technology and Prices: The Case of Australian Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(1), pages 120-129.
    2. Morton I. Kamien & Nancy L. Schwartz, 1972. "Some Economic Consequences Of Anticipating Technical Advance," Economic Inquiry, Western Economic Association International, vol. 10(2), pages 123-138, June.
    3. Abel, Andrew B., 1984. "The effects of uncertainty on investment and the expected long-run capital stock," Journal of Economic Dynamics and Control, Elsevier, vol. 7(1), pages 39-53, February.
    4. Benveniste, L M & Scheinkman, J A, 1979. "On the Differentiability of the Value Function in Dynamic Models of Economics," Econometrica, Econometric Society, vol. 47(3), pages 727-732, May.
    5. Hartman, Richard, 1972. "The effects of price and cost uncertainty on investment," Journal of Economic Theory, Elsevier, vol. 5(2), pages 258-266, October.
    6. Gershon Feder & Roger Slade, 1984. "The Acquisition of Information and the Adoption of New Technology," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(3), pages 312-320.
    7. Pindyck, Robert S, 1982. "Adjustment Costs, Uncertainty, and the Behavior of the Firm," American Economic Review, American Economic Association, vol. 72(3), pages 415-427, June.
    8. L. Dean Hiebert, 1974. "Risk, Learning, and the Adoption of Fertilizer Responsive Seed Varieties," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 56(4), pages 764-768.
    9. Robert S. Pindyck, 1984. "Uncertainty in the Theory of Renewable Resource Markets," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 51(2), pages 289-303.
    10. Brock, William A & Magill, Michael J P, 1979. "Dynamics under Uncertainty," Econometrica, Econometric Society, vol. 47(4), pages 843-868, July.
    11. Mirman, Leonard J., 1973. "The steady state behavior of a class of one sector growth models with uncertain technology," Journal of Economic Theory, Elsevier, vol. 6(3), pages 219-242, June.
    12. Abel, Andrew B, 1983. "Optimal Investment under Uncertainty," American Economic Review, American Economic Association, vol. 73(1), pages 228-233, March.
    13. Balcer, Yves & Lippman, Steven A., 1984. "Technological expectations and adoption of improved technology," Journal of Economic Theory, Elsevier, vol. 34(2), pages 292-318, December.
    14. Bhattacharya, Gautam, 1984. "Optimal resource extraction and uncertainty about new technology," Journal of Environmental Economics and Management, Elsevier, vol. 11(1), pages 39-54, March.
    15. Partha Dasgupta & Geoffrey Heal, 1974. "The Optimal Depletion of Exhaustible Resources," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 41(5), pages 3-28.
    16. Michael Hoel, 1978. "Resource Extraction when a Future Substitute has an Uncertain Cost," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 45(3), pages 637-644.
    17. Kislev Yoav & Nira Shchori-Bachrach, 1973. "The Process of an Innovation Cycle," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 55(1), pages 28-37.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kane, Sally & Reilly, John & Tobey, James, 1991. "Climate Change: Economic Implications for World Agriculture," Agricultural Economic Reports 308153, United States Department of Agriculture, Economic Research Service.
    2. Price, T. Jeffrey & Wetzstein, Michael E., 1999. "Irreversible Investment Decisions In Perennial Crops With Yield And Price Uncertainty," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 24(01), pages 1-13, July.
    3. Fisher, Brian S. & Thorpe, Sally, 1990. "Issues In Resource Management," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 34(2), pages 1-16, August.
    4. Catherine Morrison Paul, 2003. "Productivity and Efficiency Measurement in Our “New Economy”: Determinants, Interactions, and Policy Relevance," Journal of Productivity Analysis, Springer, vol. 19(2), pages 161-177, April.
    5. Mario Ekboir, Javier, 1997. "Technical change and irreversible investment under risk," Agricultural Economics, Blackwell, vol. 16(1), pages 55-65, March.
    6. Kim, Tae-Kyun, 1989. "The factor bias of technical change and technology adoption under uncertainty," ISU General Staff Papers 1989010108000010138, Iowa State University, Department of Economics.
    7. Morrison Paul, Catherine J., 2000. "Productivity And Efficiency In The U.S. Food System, Or, Might Cost Factors Support Increasing Mergers And Concentration?," Working Papers 11983, University of California, Davis, Department of Agricultural and Resource Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:zbw:bofrdp:1991_019 is not listed on IDEAS
    2. Pyyhtiä, Ilmo, 1991. "Investment plans, innovations and revision costs in Finnish manufacturing," Research Discussion Papers 19/1991, Bank of Finland.
    3. Pyyhtiä, Ilmo, 1991. "Investment plans, innovations and revision costs in Finnish manufacturing," Bank of Finland Research Discussion Papers 19/1991, Bank of Finland.
    4. Chateau, John Peter D., 1985. "Liability management of financial intermediaries in a dynamic and uncertain perspective," European Economic Review, Elsevier, vol. 27(2), pages 183-200, March.
    5. Bahmani-Oskooee, Mohsen & Hajilee, Massomeh, 2013. "Exchange rate volatility and its impact on domestic investment," Research in Economics, Elsevier, vol. 67(1), pages 1-12.
    6. Eksi, Ozan & Onur Tas, Bedri Kamil, 2022. "Time-varying effect of uncertainty shocks on unemployment," Economic Modelling, Elsevier, vol. 110(C).
    7. Dawood Ashraf & Mohsin Khawaja & M. Ishaq Bhatti, 2022. "Raising capital amid economic policy uncertainty: an empirical investigation," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 8(1), pages 1-32, December.
    8. Jeon, Haejun & Cui, Xue & Zhang, Chuanqian, 2023. "The effects of labor choice on investment and output dynamics," Journal of Corporate Finance, Elsevier, vol. 83(C).
    9. Shin, Kwanho, 1999. "Fluctuating uncertainty and flexibility value," The Quarterly Review of Economics and Finance, Elsevier, vol. 39(3), pages 329-340.
    10. Rahman, Atiqur & Loulou, Richard, 2001. "Technology acquisition with technological progress: effects of expectations, rivalry and uncertainty," European Journal of Operational Research, Elsevier, vol. 129(1), pages 159-185, February.
    11. Vicky Henderson & David Hobson, 2013. "Risk Aversion, Indivisible Timing Options, and Gambling," Operations Research, INFORMS, vol. 61(1), pages 126-137, February.
    12. Sing, Tien-Foo & Patel, Kanak, 2001. "Evidence of irreversibility in the UK property market," The Quarterly Review of Economics and Finance, Elsevier, vol. 41(3), pages 313-334.
    13. Anubha Dhasmana, 2021. "Employment growth in the face of exchange rate uncertainty: The role of trade and foreign equity finance," Southern Economic Journal, John Wiley & Sons, vol. 88(1), pages 79-117, July.
    14. Hines Jr., James R. & Keen, Michael J., 2021. "Certain effects of random taxes," Journal of Public Economics, Elsevier, vol. 203(C).
    15. Bao-We-Wal BAMBE, 2022. "Inflation Targeting and Private Domestic Investment in Developing Countries," Working Papers REM 2022/0237, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    16. Just, Richard E. & Netanyahu, Sinaia & Olson, Lars J., 2005. "Depletion of natural resources, technological uncertainty, and the adoption of technological substitutes," Resource and Energy Economics, Elsevier, vol. 27(2), pages 91-108, June.
    17. Mellati, Ali, 2008. "Uncertainty and investment in private sector: An analytical argument and a review of the economy of Iran," MPRA Paper 26655, University Library of Munich, Germany.
    18. Fridrik Baldursson & Nils-Henrik Fehr, 2012. "Price Volatility and Risk Exposure: On the Interaction of Quota and Product Markets," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 52(2), pages 213-233, June.
    19. Yingyi Tsai & Ching‐tang Wu, 2009. "Integrated Production And The Investment–Uncertainty Relationship," South African Journal of Economics, Economic Society of South Africa, vol. 77(1), pages 102-112, March.
    20. Sumru Altug & Fanny S. Demers & Michel Demers, 2004. "Tax Policy and Irreversible Investment," CDMA Working Paper Series 200404, Centre for Dynamic Macroeconomic Analysis.
    21. SHINADA Naoki, 2008. "Corporate Investment and Uncertainty: An empirical analysis," Discussion papers 08033, Research Institute of Economy, Trade and Industry (RIETI).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aaea86:278110. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: http://www.aaea.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.