Charlotte Bucht
Additional contact information
Charlotte Bucht: Ministry of Finance, Postal: 103 33 Stockholm, Sweden
Abstract: In this essay a customer market model is constructed, where an entrepreneur-owned firm has two choice variables, namely the customer stock and the capital stock. The firm is assumed to be completely credit rationed and the investment procedure is characterised by time-to-build. The model is solved numerically to yield steady state paths for the ratio of customers to capital, investments and price. A comparative statics analysis is carried out so as to find out how price and investments respond to exogenous shocks. The model is also tested empirically with data for the Swedish manufacturing sector. The results from the theoretical model point to a close relationship between price setting and investment decisions, which is then confirmed by the empirical investigation.
Keywords: Price Setting; Customer Markets; Investments
JEL-codes: E39
50 pages, October 15, 1997
Full text files
1997wp27.pdf
Questions (including download problems) about the papers in this series should be directed to Ulrika Ă–jdeby ()
Report other problems with accessing this service to Sune Karlsson ().
RePEc:hhs:uunewp:1997_027This page generated on 2024-09-13 22:17:36.