The demand and supply for investment goods: does the market clear?

Mieko Nishimizu; Richard E. Quandt; harvey S. Rosen

doi:10.1016/0164-0704(82)90002-7

The demand and supply for investment goods: does the market clear?

Mieko Nishimizu, Richard E. Quandt, harvey S. Rosen

Economics

Research output: Contribution to journal › Article › peer-review

4 Scopus citations

Abstract

Standard theoretical considerations suggest that the quantity and price of a good are jointly determined by supply and demand. In the literature on physical investment, however, attention has been focused almost exclusively on the demand side. This paper considers the theoretical and statistical problems that arise when the demand and supply sides of the market for investment goods are estimated simultaneously. One of the important problems is dealing with the possibility that the price may not adjust instantaneously to clear the market. The model is estimated using data from post-war Japan. The two most important results that emerge are: 1) The long-run supply curve of investment goods is virtually horizontal; and 2) The market appears to be characterized by equilibrium.

Original language	English (US)
Pages (from-to)	1-21
Number of pages	21
Journal	Journal of Macroeconomics
Volume	4
Issue number	1
DOIs	https://doi.org/10.1016/0164-0704(82)90002-7
State	Published - 1982

All Science Journal Classification (ASJC) codes

Economics and Econometrics

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10.1016/0164-0704(82)90002-7

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title = "The demand and supply for investment goods: does the market clear?",

abstract = "Standard theoretical considerations suggest that the quantity and price of a good are jointly determined by supply and demand. In the literature on physical investment, however, attention has been focused almost exclusively on the demand side. This paper considers the theoretical and statistical problems that arise when the demand and supply sides of the market for investment goods are estimated simultaneously. One of the important problems is dealing with the possibility that the price may not adjust instantaneously to clear the market. The model is estimated using data from post-war Japan. The two most important results that emerge are: 1) The long-run supply curve of investment goods is virtually horizontal; and 2) The market appears to be characterized by equilibrium.",

author = "Mieko Nishimizu and Quandt, {Richard E.} and Rosen, {harvey S.}",

note = "Funding Information: *We would like to thank Jonathan Eaton, Stephen M. Goldfeld, and two referees for useful suggestions, and Susan M. Morgan for assistance with the computations. Financial assistance from the NSF is gratefully acknowledged. {\textquoteleft}See Jorgenson (1987), (1971), Hall and J o rg enson (1987), Bischoff Hall (1977). Copyright: Copyright 2014 Elsevier B.V., All rights reserved.",

year = "1982",

doi = "10.1016/0164-0704(82)90002-7",

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T1 - The demand and supply for investment goods

T2 - does the market clear?

AU - Nishimizu, Mieko

AU - Quandt, Richard E.

AU - Rosen, harvey S.

N1 - Funding Information: *We would like to thank Jonathan Eaton, Stephen M. Goldfeld, and two referees for useful suggestions, and Susan M. Morgan for assistance with the computations. Financial assistance from the NSF is gratefully acknowledged. ‘See Jorgenson (1987), (1971), Hall and J o rg enson (1987), Bischoff Hall (1977). Copyright: Copyright 2014 Elsevier B.V., All rights reserved.

PY - 1982

Y1 - 1982

N2 - Standard theoretical considerations suggest that the quantity and price of a good are jointly determined by supply and demand. In the literature on physical investment, however, attention has been focused almost exclusively on the demand side. This paper considers the theoretical and statistical problems that arise when the demand and supply sides of the market for investment goods are estimated simultaneously. One of the important problems is dealing with the possibility that the price may not adjust instantaneously to clear the market. The model is estimated using data from post-war Japan. The two most important results that emerge are: 1) The long-run supply curve of investment goods is virtually horizontal; and 2) The market appears to be characterized by equilibrium.

AB - Standard theoretical considerations suggest that the quantity and price of a good are jointly determined by supply and demand. In the literature on physical investment, however, attention has been focused almost exclusively on the demand side. This paper considers the theoretical and statistical problems that arise when the demand and supply sides of the market for investment goods are estimated simultaneously. One of the important problems is dealing with the possibility that the price may not adjust instantaneously to clear the market. The model is estimated using data from post-war Japan. The two most important results that emerge are: 1) The long-run supply curve of investment goods is virtually horizontal; and 2) The market appears to be characterized by equilibrium.

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The demand and supply for investment goods: does the market clear?

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