A Model of Investment and Capacity Utilization |
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Academia Sinica adjustment cost assume Bailey and Scarth capacity utilization capital depreciation capital installed capital service capital stock capital utilization rate concave function corporate tax cost of investment denote depreciation allowance depreciation of capital depreciation rate differentiation discount rate due to increased dynamic optimization effect equations equilibrium firm's optimization behavior framework G(mK H₁ Hamiltonian Hence imputed value increasing function induce the firm Insert Figure installed capital interval dt investment tax credit investment theory investment-capital ratio Kee-Nam Cheung locus marginal costs marginal revenue product market value mPF₁ mPF₁(mK neoclassical optimality conditions PF(mK physical depreciation Pontryagin present value production function q ġ rate of capital rate of investment rate of return realized rate realized return relationship required rate ro+ f saddle point Section shadow price Shu-Wen Chao steady Tamkang University Tobin's q transversality conditions unit of capital value of capital value of marginal Κο әк