Investissement et embauche avec coûts d’ajustement fixes et asymétriques

Xavier Fairise () and Jérome Glachant ()
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Xavier Fairise: GAINS - Groupe d'Analyse des Itinéraires et des Niveaux Salariaux - UM - Le Mans Université
Jérome Glachant: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique

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Abstract: A firm operating in a deterministic and continuous time world uses a Cobb-Douglas technology with diminishing returns and faces complex adjustment costs of its factors. On the one hand, a proportional cost of employment applies to the irreversible labor factor. On the other hand, investing requires a fixed cost that is proportional to the firm's workforce. The firm then determines its hiring and investment policy which maximizes the discounted value of its cash flows. The combination of fixed and variable costs involves a non-trivial cycle of factors adjustment in which there is a continuous hiring episode followed by a hiring freeze followed by a simultaneous spike in investment and hiring. The article proposes a numerical assessment of the effects of fixed cost size on the life cycle of the firm.

Date: 2019-12-13
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Published in Revue d'économie politique, 2019, 129 (5), pp.693-713. ⟨10.3917/redp.295.0693⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-04204696

DOI: 10.3917/redp.295.0693

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