On the optimal capital: labour ratios in towns when demands for outputs are stochastic

Jan Serck-Hanssen
Additional contact information
Jan Serck-Hanssen: UiO - University of Oslo

Working Papers from HAL

Abstract: One of the advantages of larger towns with a diversified industrial structure compared to smaller towns with less diversified industries, is that larger towns may utilize more efficiently production factors which are mobile within the town but immobile between the town and the outside world. If demand for outputs of the various industries is stochastic and not too strongly correlated,the corresponding demand for mobile production factors may in a certain sense even out to a larger extent in larger than in smaller towns. This is a consequence of the law of large numbers. In larger towns one may avoid in an average sense both that a large relative part of the mobile production factors are unemployed because of lack of demand and that there is a large surplus demand for these factors in relation to the supply. Due to the latter property,one may also avoid that a large part of the immobile factors like specialized machinery is unutilized due to lack of supply of mobile factors.

Keywords: Larger town; Industry; Optimal capital (search for similar items in EconPapers)
Date: 1981-05
Note: View the original document on HAL open archive server: https://hal.science/hal-01542363
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in [Research Report] Institut de mathématiques économiques ( IME). 1981, 36 p., figures

Downloads: (external link)
https://hal.science/hal-01542363/document (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-01542363

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().