Abstract
In that paper, a model of the optimal behaviour of firms with respect to the determination of capacity employment, investment and inventories is presented and estimated. Firms face an infinite horizon and an uncertain expected demand. The optimality conditions are derived, linearized and integrated. After having defined the stable optimal paths, one can proceed to the estimation of the model and to various simulations.
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Artus, P. Inventory investment, investment and employment with uncertain demand. Empirical Economics 10, 177–200 (1985). https://doi.org/10.1007/BF01979487
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DOI: https://doi.org/10.1007/BF01979487