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A clay-clay vintage model approach for sectors of industry in Netherlands

Summary

To confirm on a more disaggregated level earlier macro-economic studies in the field, an attempt is made in this paper to find out whether a vintage model of the clay-clay type also provides a framework for a plausible explanation of long-run sectoral developments of production capacity, labour requirements and employment. Nine sectors are considered, comprising the total enterprises sector. For this total enterprises sector an (amended) clay-clay vintage model is also (re-)estimated. The results indicate that in the process of adjustments, real labour costs are the strategic variable, though capacity utilization is also recognized as a factor affecting employment directly and indirectly. Projections of employment with the macro vintage model are satisfactory. Specifically, they are more satisfactory than the extrapolations for either manufacturing or non-manufacturing taken separately, and the macro projections compete fairly well with those based on an overall aggregation of employment projections over all nine sectors considered.

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den Hartog, H., Tjan, H.S. A clay-clay vintage model approach for sectors of industry in Netherlands. De Economist 128, 129–188 (1980). https://doi.org/10.1007/BF01717799

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Keywords

  • International Economic
  • Public Finance
  • Labour Cost
  • Production Capacity
  • Capacity Utilization