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Working Paper

Factor-Adjustment Costs at the Industry Level

Recent theoretical and econometric developments allow estimation of dynamic cost functions that include optimal adjustment of quasi-fixed factors. Such a cost function is estimated for the U.S. steel industry for the years 1954-1985 to investigate the cost of adjusting blue- and white-collar labor stocks, and to examine the importance of the specification of the adjustment-cost function.

Suggested Citation

Deily, Mary, and Dennis Jansen. 1989. “Factor-Adjustment Costs at the Industry Level.” Federal Reserve Bank of Cleveland, Working Paper No. 89-11.