Production Process Heterogeneity, Time to Build, and Macroeconomic Performance

Mario Amendola, Jean-Luc Gaffard and Francesco Saraceno

Revue de l'OFCE, 2012, vol. N° 124, issue 5, 263-294

Abstract: This paper describes the out-of-equilibrium approach to the analysis of economic processes. We argue that such an approach is adapted to study qualitative (or structural) changes, like technical progress or changes in preferences. Truly sequential analyses manage to capture the essential features of qualitative change. In particular, we show how this approach shifts the focus from the issue of optimality to the one of viability of the processes of change. The objective of the paper is, first, to highlight the analytical elements of an out-of-equilibrium approach, so as to serve as a guide for the construction of this type of models; second to show, how this analysis allows to see controversial phenomena, like for example the debate on wage rigidity or the productivity paradox in a new and different light ; third to identify the real causes of the on-going crisis.

Keywords: out-of-equilibrium; structural change; credit constraints; agent-based models; adaptive expectations; time-to-build; sequential analysis; macroeconomic policy; productivity paradox (search for similar items in EconPapers)
Date: 2012
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Working Paper: Production process heterogeneity, time to build, and macroeconomic performance (2012)
Working Paper: Production process heterogeneity, time to build, and macroeconomic performance (2012)
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