TY  - JOUR
AU  - Bernstein,Jeffrey I.
TI  - Price Margins and Capital Adjustment: Canadian Mill Products and Pulp and Paper Industries
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3982
PY  - 1992
Y2  - December 1992
UR  - http://www.nber.org/papers/w3982
L1  - http://www.nber.org/papers/w3982.pdf
N1  - Author contact info:
Jeffrey I. Bernstein
Department of Economics
University Park Campus
Florida International University
11200 S.W. 8th Street
Miami, FL 33199
Tel: 305/348-2592
E-Mail: jeffrey.bernstein@fiu.edu
AB  - The purpose of this paper is to estimate a model incorporating noncompetitive behaviour in product and factor markets, In addition, capital accumulation is subject to adjustment costs so that firms are not constrained to be in long-run equilibrium. The model is applied to two major Canadian manufacturing industries: pulp and paper and mill products. The results show for both industries in each of the three product markets and the wood input market that there is competitive behaviour. In addition, the industries are not in long-run equilibrium as marginal adjustment costs cause marginal profit to exceed the rental rate on capital. With the industries exhibiting short-run competitive behaviour in product and factor markets, new estimates are derived for scale economies and rates of technological change. Unlike the results from other studies, both industries exhibit small scale economies and positive rates of technological change.
ER  -