Browsing by Subject "D92"

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  • Chen, Yu-Fu; Funke, Michael (2008)
    BOFIT Discussion Papers 29/2008
    Published in China Economic Review 20 (3), 2009, pp. 558-572
    In January 2008, China adopted a new labour contract law. This new law represents the most significant reform to the legislation on employment relations in mainland China in more than a decade. The paper provides a theoretical framework on the inter-linkages between labour market regulation, option value and the choice and timing of employment. All in all, the paper demonstrates that the Labour Contract Law in its own right will have only small impacts upon employment in the fast-growing Chinese economy. Rather, induced increasing unit labour costs represent the real issue and may reduce employment. JEL-Classification: C61, D81, D92, J23 Keywords: China, labour contract law, real options, employment
  • Verona, Fabio (2013)
    Bank of Finland Research Discussion Papers 18/2013
    Published in Journal of Money, Credit and Banking, Volume 46, Issue 8, December 2014:1627–1656
    Investment in physical capital at the micro level is infrequent and large, or lumpy. The most common explanation for this is that firms face non-convex physical adjustment costs. The model developed in this paper shows that information costs make investment lumpy at the micro level, even in the absence of non-convex adjustment costs. When collecting and processing information is costly, the firm optimally chooses to do it sporadically and to be inactive most of the time. This behavior results in infrequent and possibly large capital adjustments. The model fits plant-level investment rate moments well, and it also matches some higher order moments of aggregate investment rates. Keywords: investment dynamics, information costs, inattentiveness, lumpy investment JEL classification: D21, D83, D92, E22