scholarly journals User Costs versus Waiting Services and Depreciation in a Model of Production

2010 ◽  
Vol 230 (6) ◽  
Author(s):  
W.Erwin Diewert
Keyword(s):  
Capital Stock ◽  
General Model ◽  
Cost Of Capital ◽  
User Cost ◽  
Capital Goods ◽  
User Costs ◽  
Resource Requirements ◽  
The One ◽  
Investment Goods ◽  
Period Model

SummaryThe paper develops an extension of a one period model of production involving beginning and end of the period capital stocks along with output and input flows that is due to Hicks and Edwards and Bell. This generalized Austrian model of production takes into account that end of the period capital stocks result from: (i) purchases of new investment goods; (ii) internal construction of firm capital stock components and (iii) holdings of (depreciated) capital goods that were held by the firm at the beginning of the period. These different methods of creating end of period holdings of capital stocks generally have different resource requirements and hence the one period production possibilities set is more complex than the usual one. This general model of production is used to justify the decomposition of the Jorgensonian user cost of capital into separate waiting services and depreciation components.

Ein nutzungskostenbasierter Ansatz zur Messung des Faktors Kapital in aggregierten Produktionsfunktionen / A User Cost Approach to Capital Measurement in Aggregate Production Functions

2013 ◽  
Vol 233 (5-6) ◽  
Author(s):  
Thomas A. Knetsch
Keyword(s):  
Capital Stock ◽  
User Cost ◽  
National Accounts ◽  
User Costs ◽  
The Individual ◽  
Individual Asset ◽  
Capital Services ◽  
Productive Assets ◽  
Weighting Methods ◽  
Observation Period

SummaryA method is proposed to measure capital services in production. This means that productive assets are weighted according to their user costs. The user costs of the individual asset classes are estimated based on data from the national accounts and other sources. The results show that, in the observation period between 1991 and 2011, enterprises’ capital services expand faster than the officially published capital stock. For the economy as a whole, this applies only to phases of cyclical expansion. As the capital stock is aggregated using asset prices, the differences can be explained by the different weighting methods in conjunction with the varying speeds at which the individual asset types have accumulated over time. In growth accounting, different estimates of total factor productivity emerge. The methodological difference, however, does not significantly affect the estimates of parametric production function specifications.

scholarly journals Determinants of investment in Namibia

2013 ◽  
Vol 10 (4) ◽  
pp. 21-30
Author(s):  
Joel Hinaunye Eita
Keyword(s):  
Financial Development ◽  
Cost Of Capital ◽  
Positive Impact ◽  
User Cost ◽  
Real Gdp ◽  
Negative Effect ◽  
The Cost ◽  
Investment Goods ◽  
Domestic Products ◽  
Positive Effect

This paper presents an analysis of the determinants of investment in Namibia for the period 1971 to 2010. The results indicate that investment in Namibia can be raised by increasing real GDP, openness and financial development, and by decreasing the user cost of capital. Although saving has an expected positive coefficient, it is statistically insignificant. This suggests that saving is necessary, but not sufficient to accelerate investment in Namibia. The positive effect of effect of openness implies that increase in exports generated foreign exchange earnings necessary to purchase the imported capital goods and expand the market for domestic products. Increase in imports enabled the country to have greater access to investment goods in the international market and accelerates investment. A positive impact of financial development suggests that the financial sector is important in facilitating the channeling of resources from savers to investment activities that offer high return. The negative effect of user cost of capital implies that investment in Namibia can be accelerated by reducing the cost of capital.

scholarly journals Annuity Markets and Capital Accumulation

2019 ◽  
Vol 20 (1) ◽  
Author(s):  
Shantanu Bagchi ◽  
James A. Feigenbaum
Keyword(s):  
Old Age ◽  
Capital Stock ◽  
Early Life ◽  
Capital Accumulation ◽  
Substitution Effect ◽  
Income Effect ◽  
Substitution Effects ◽  
Income Effects ◽  
Annuity Markets ◽  
The One

AbstractWe examine how the absence of annuities in financial markets affects capital accumulation in a two-period overlapping generations model. Our findings indicate that the effect on capital is ambiguous in general equilibrium, because there are two competing mechanisms at work. On the one hand, the absence of annuities increases the price of old-age consumption relative to the price of early-life consumption. This induces a substitution effect that reduces saving and capital, and an income effect that has the opposite effect as households want to consume less when young, causing them to save more. On the other hand, accidental bequests originate from the assets of the deceased under missing annuity markets. The bequest received in early life always has a positive income effect on saving, but the bequest received in old age, conditional on survival, is effectively a partial annuity with both substitution and income effects. We find that when the desire to smooth consumption is high, the income effects dominate, so the capital stock always increases when annuity markets are missing. However, when the desire to smooth consumption is low, the substitution effects dominate, and the capital stock decreases with missing annuity markets.

scholarly journals Taxes and the User Cost of Capital for Owner-Occupied Housing

1982 ◽  
Vol 10 (4) ◽  
pp. 375-393 ◽  
Author(s):  
Patric H. Hendershott ◽  
Joel Slemrod
Keyword(s):  
Cost Of Capital ◽  
User Cost

scholarly journals Inflation and the User Cost of Capital: Does Inflation Still Matter?

10.3386/w6046 ◽  
1997 ◽  
Author(s):  
Darrel Cohen ◽  
Kevin Hassett ◽  
R. Glenn Hubbard
Keyword(s):  
Cost Of Capital ◽  
User Cost

scholarly journals Two suggestions of how to define a multistate coherent system

1982 ◽  
Vol 14 (02) ◽  
pp. 434-455 ◽  
Author(s):  
B. Natvig
Keyword(s):  
General Model ◽  
Reliability Theory ◽  
Coherent System ◽  
Multistate System ◽  
Complete Failure ◽  
Functioning Level ◽  
The One ◽  
Independent Work

One inherent weakness of traditional reliability theory is that the system and the components are always described just as functioning or failed. However, recent papers by Barlow and Wu (1978) and El-Neweihi et al. (1978) have made significant contributions to start building up a theory for a multistate system of multistate components. Here the states represent successive levels of performance ranging from a perfect functioning level down to a complete failure level. In the present paper we will give two suggestions of how to define a multistate coherent system. The first one is more general than the one introduced in the latter paper, the results of which are, however, extendable. (This is also true for a somewhat more general model than ours, treated in independent work by Griffith (1980).) Furthermore, some new definitions and results are given (which trivially extend to the latter model). Our second model is similarly more general than the one introduced in Barlow and Wu (1978), the results of which are again extendable. In fact we believe that most of the theory for the traditional binary coherent system can be extended to our second suggestion of a multistate coherent system.

USER COSTS, THE FINANCIAL FIRM, AND MONETARY AND REGULATORY POLICY

2019 ◽  
Vol 24 (6) ◽  
pp. 1547-1573
Author(s):  
Maksim Isakin ◽  
Apostolos Serletis
Keyword(s):  
Financial Services ◽  
Deposit Insurance ◽  
Banking Sector ◽  
Financial Regulation ◽  
Policy Instruments ◽  
Commercial Banking ◽  
User Cost ◽  
Holding Costs ◽  
User Costs ◽  
Financial Firm

We investigate how key monetary policy instruments and financial regulation affect the banking firm. We take the user-cost approach to the construction of prices for financial services and use quarterly data on the U.S. commercial banking sector, over the period from 1992 to 2016, obtained from the Federal Deposit Insurance Corporation. We use the symmetric generalized Barnett variable profit function to derive demands for and supplies of monetary and nonmonetary goods and provide evidence consistent with neoclassical microeconomic theory. We find that the compensated price elasticities of banking technology are small in magnitude. Yet a hypothetical policy experiment shows that even small changes in the holding costs of financial goods can result in significant changes in user costs and the quantities demanded and supplied.

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