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Capital Utilization and Investment in a «Mixed» Economy

Published online by Cambridge University Press:  17 August 2016

A.P. Hamlin  and
D.F. Heathfield
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Extract

It has become customary to discuss the investment decision of the firm and the capital utilization decision separately. Both topics have commanded considerable attention in recent years (Nickell (1978), Betancourt and Clague (1981) provide good entry points in to the literature) and, at the informal level, the links between utilization decisions and investment decisions have been widely recognised. However, when considering investment decisions more formally, analysts often agree with Nickell that attempting to introduce a utilization dimension makes it « clear that even with just two factors, a specification of the production possibilities is quite tricky given that output will depend on the number of workers using the capital at any given time and also on the number of hours worked by each worker » (Nickell (1978) p. 145).

Type
Part Four: Measurement of Capital Utilisation and Rates of Return
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 50 , Issue 3-4 , 1984 , pp. 331 - 352
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1984 

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