Overcapacity and the Acceleration Principle

Chenery, Hollis B.

doi:10.2307/1907804

Cited by 266 publications

(126 citation statements)

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“…To complete this plot-inspired remark, some additional results may be useful to quantify those scale economies. In another paper, Chenery suggested that the long-run cost function of the gas pipeline has an almost constant elasticity of output with respect to cost over most of its range (Chenery, 1952 Hence, an investigation based on Griffin's "pseudo data" method seems needed (Griffin, 1977(Griffin, , 1978(Griffin, , 1979. This method was developed in the 1970s.…”

Section: Problem Formulationmentioning

confidence: 99%

“…Based on these "pseudo data", simple relationships can be statistically estimated. Thanks to the usual log transformation, an Ordinary Least Square (OLS) regression is sufficient to estimate the specification suggested in Chenery (1952). The goodness of fit measure R 2 indicates an excellent explanatory power which is quite unusual for such a simple specification.…”

Section: Problem Formulationmentioning

confidence: 99%

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A Cost Function for the Natural Gas Transmission Industry: Further Considerations

Massol

2011

The Engineering Economist

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This article studies the cost function for the natural gas transmission industry. In addition to a tribute to H.B. Chenery, it firstly offers some further comments on a recent contribution (Yépez, 2008): a statistical characterization of long-run scale economies, and a simple reformulation of the long-run problem. An extension is then proposed to analyze how the presence of seasonally-varying flows modifies the optimal design of a transmission infrastructure. Lastly, the case of a firm that anticipates a possible random rise in its future output is also studied to discuss the optimal degree of excess capacity to be built into a new transmission infrastructure.

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Section: Problem Formulationmentioning

confidence: 99%

Section: Problem Formulationmentioning

confidence: 99%

A Cost Function for the Natural Gas Transmission Industry: Further Considerations

Massol

2011

The Engineering Economist

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“…We follow the model specification of Mintz and Huang (1991) Clark (1917) and then modified by Koyck (1954) and Chenery (1952) that considers gross investment, I, as a distributed lag on production, Y, and depreciation, approximated by a proportion of the capital stock, K. Therefore,…”

Section: Direct Indirect Effect or Both: Mintz And Huang Modelmentioning

confidence: 99%

Guns, Economic Growth and Education During the Second Half of the Twentieth Century: Was Spain Different?

Jurado-Sánchez

Jiménez-Martín

2014

SSRN Journal

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In the past decades, numerous studies have been conducted on the trade-off between guns and butter, namely defense versus social sector expenditure. The aim of this research is identifying whether indeed defense spending crowded out investment and other social expenditures as health and education. Previous research does not yield strong and unambiguous evidence of neither positive nor negative effects of military expenditure on social spending. It is striking that the guns versus butter dilemma has not been extensively studied for Spain. Using Mintz and Huang (1991)

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“…17 The flexible accelerator model was introduced by the pioneering work of Chenery (1952) and Koyck (1954). 18 Partial irreversibility makes the adjustment costs weakly convex and kinked at zero investment.…”

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confidence: 99%

The Impact of Market Structure and Irreversibility on Investment under Uncertainty: An Empirical Analysis

Maioli

2005

SSRN Journal

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The empirical literature of investment under uncertainty has vastly neglected to account for the role played by market structure. Recently the theory has however started to merge real options theory with game theory to offer alternative explanations to strategic investment behaviour. This paper estimates an error correction model of investment under product price uncertainty for 23 French industries during the period 1977-1997 and represents the first empirical work that includes variables of market structure (in terms of degree of competition) in a model of investment under uncertainty. It is also one of the very first attempts to make explicit the empirical relationship between investment and uncertainty under different degrees of irreversibility. Although I find evidence that in general uncertainty has a negative impact on investment, the results show that the more concentrated industries are not significantly affected. Irreversibility, as predicted by theory, has a significant negative impact on investment, but when degree of competition and irreversibility are considered together it appears that the more concentrated industries can shield from the negative impact of uncertainty notwithstanding the presence of downward adjustment costs of capital. This seems in line with some of the recent developments proposed by the theory.JEL classification: C33, D80, E22, L16, L60

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Overcapacity and the Acceleration Principle

Cited by 266 publications

References 0 publications

A Cost Function for the Natural Gas Transmission Industry: Further Considerations

A Cost Function for the Natural Gas Transmission Industry: Further Considerations

Guns, Economic Growth and Education During the Second Half of the Twentieth Century: Was Spain Different?

The Impact of Market Structure and Irreversibility on Investment under Uncertainty: An Empirical Analysis

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