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- Title
Estimating UK capital adjustment costs.
- Authors
Groth, Charlotta
- Abstract
This article presents information on the costs associated with changing the level of capital; capital adjustment costs in Great Britain. The motivation for considering these types of costs is that when firms are investing in capital, they may need to divert resources to installing new capital rather than producing marketable output. This means that in periods of rapid investment growth, firms could be producing two types of products: the final product sold in the market and the services used within the firm to install capital. Marketable output may therefore be lower in periods of high investment growth, and this would cause a downward bias in estimates of measured productivity growth.
- Subjects
UNITED Kingdom; ECONOMIC conditions in Great Britain; COST estimates; INVESTMENTS; MARKETING; ECONOMIC forecasting; CAPITAL
- Publication
Bank of England Quarterly Bulletin, 2005, Vol 45, Issue 2, p182
- ISSN
0005-5166
- Publication type
Article