The "Fundamental Transformation" in Macroeconomics /
Caballero, Ricardo J.
The "Fundamental Transformation" in Macroeconomics / Ricardo J. Caballero, Mohamad L. Hammour. - Cambridge, Mass. National Bureau of Economic Research 1996. - 1 online resource: illustrations (black and white); - NBER working paper series no. w5471 . - Working Paper Series (National Bureau of Economic Research) no. w5471. .
February 1996.
When factors enter into joint-production, they typically develop a degree of specificity with respect to each other. It is well known that, when combined with contracting difficulties, specificity gives rise to a Williamsonian 'Fundamental Transformation' from an ex-ante competitive relationship to an ex-post bilateral monopoly. The macroeconomic consequences of widespread specificity are far-reaching. Specificity results in misallocation, underutilization, and unemployment of the economy's productive factors; it hampers growth by depressing the incentives to replace what is outdated and to fully utilize the economy's resources; it disrupts macroeconomic adjustment by inducing a wedge between timid creation and excessive destruction of the old system; and it exacerbates downturns by `elastifying' the cyclical response of inelastic factors.
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Mode of access: World Wide Web.
The "Fundamental Transformation" in Macroeconomics / Ricardo J. Caballero, Mohamad L. Hammour. - Cambridge, Mass. National Bureau of Economic Research 1996. - 1 online resource: illustrations (black and white); - NBER working paper series no. w5471 . - Working Paper Series (National Bureau of Economic Research) no. w5471. .
February 1996.
When factors enter into joint-production, they typically develop a degree of specificity with respect to each other. It is well known that, when combined with contracting difficulties, specificity gives rise to a Williamsonian 'Fundamental Transformation' from an ex-ante competitive relationship to an ex-post bilateral monopoly. The macroeconomic consequences of widespread specificity are far-reaching. Specificity results in misallocation, underutilization, and unemployment of the economy's productive factors; it hampers growth by depressing the incentives to replace what is outdated and to fully utilize the economy's resources; it disrupts macroeconomic adjustment by inducing a wedge between timid creation and excessive destruction of the old system; and it exacerbates downturns by `elastifying' the cyclical response of inelastic factors.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.