Resource Allocation in a Simple, Two-Sector, Model with Production Risk

Britto, Ronald

doi:10.2307/2231794

Cited by 16 publications

(3 citation statements)

References 8 publications

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“…45-56). Previous researchers have analyzed the effects of production uncertainty in one sector considering resource allocation in a two-sector model (Batra 1974;Britto 1980;Mills 1983). Consumer preferences (demand function) influence production (Harford and Park 1985).…”

Section: The Hayekian Trianglementioning

confidence: 99%

Resource allocation: A hayekian paradigm for maritime conglomerates

Lombardo

Mulligan

2003

Quart J Austrian Econ

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Section: The Hayekian Trianglementioning

confidence: 99%

Resource allocation: A hayekian paradigm for maritime conglomerates

Lombardo

Mulligan

2003

Quart J Austrian Econ

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“…While there does not appear to be any standard method of modeling output uncertainty in the literature, multiplicative output uncertainty, which is used here, is a fairly common specification. It has been used by Honda (1983), Lapan and Moschini (1994), and Grant (1985) in partial equilibrium models, and by Batra (1974Batra ( , 1975, Kemp (1976) and Britto (1980), in general equilibrium models. Some recent studies 0377-2217/$ -see front matter Ó 2008 Elsevier B.V. All rights reserved.…”

Section: Introductionmentioning

confidence: 99%

Production decisions under joint price and production uncertainty

Dalal¹,

Alghalith²

2009

European Journal of Operational Research

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“…Batra (1974),Britto (1980),Mills (1983), and Schmitz(2004)present models analyzing the impact of uncertainty on production.…”

mentioning

confidence: 99%

Accounting for the business cycle: Nominal rigidities, factor heterogeneity, and Austrian capital theory

Mulligan

2006

Rev Austrian Econ

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An Austrian interpretation of the New Keynesian small menu cost model of the business cycle is proposed. Austrian and New Keynesian business cycle theories share the feature that the cycle is generated by rigidities which prevent the economy from adapting instantaneously to changing conditions. Austrian business cycle theory is capital-based, focusing on credit expansion which artificially lowers interest rates and causes an investment boom and unsustainable business expansion. In contrast, the New Keynesian small menu cost model of the business cycle is based on nominal rigidities which prevent markets from clearing. Small menu costs introduce dichotomous behavior, where firms find it locally optimal to avoid instantaneous output price adjustments in the face of the cost, but this local optimum results in economy-wide output and employment fluctuations which are much greater in relative magnitude. The small menu cost model of the business cycle is extended and reinterpreted in light of Austrian business cycle theory with heterogeneous, multiply-specific capital, thus providing a rigorous formalization of the Austrian business cycle. The Austrian interpretation of this New Keynesian model fortuitously addresses several of its shortcomings. Copyright Springer Science + Business Media, LLC 2006Austrian business cycle theory, New Keynesian small menu cost model, Hayekian triangle,

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Resource Allocation in a Simple, Two-Sector, Model with Production Risk

Cited by 16 publications

References 8 publications

Resource allocation: A hayekian paradigm for maritime conglomerates

Resource allocation: A hayekian paradigm for maritime conglomerates

Production decisions under joint price and production uncertainty

Accounting for the business cycle: Nominal rigidities, factor heterogeneity, and Austrian capital theory

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