Reorganization / Robert E. Hall.

Format:

Book

Author/Creator:

Hall, Robert E.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w7181.

NBER working paper series no. w7181

Language:

English

Subjects (All):

Econometric models.

Econometrics.

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1999.

Cambridge, Massachusetts : National Bureau of Economic Research, 1999.

Summary:

One of the productive activities engaging the work force is reorganizing. When factors of production are better matched, productivity is higher. The probabilistic matching model of Diamond, Mortensen, and others provides a way to make the idea of reorganization precise. Because the flow of organizational effort generates benefits lasting well into the future, it is appropriate to think of organizational capital. Unemployment-job seeking-is one of the inputs to organization. The flow of organizational effort represented by unemployment is analogous to the flow of physical investment. When an adverse technology shock causes job destruction, the economy substitutes the formation of new organizational capital for the flow of output. An increase in the interest rate can cause intertemporal substitution toward lower job destruction and less reorganization, but this effect may not come into play for a brief unexpected increase, and may be overwhelmed by intertemporal substitution in physical capital.

Notes:

Print version record

June 1999.