Economics and Finance


Empirical Investigation of the Endogenous Regulation of Production by Assets for Cge Models

Authors: Stuart J. Nettleton

Asset turnover has been used for approximately a century in corporate capital allocation. Capital expansion coefficients have been used in the Leontief Dynamic Model but the use of asset turnover ratios to regulating production growth in Computable General Equilibrium models has been limited. This research investigates the hypothesis that there is a causal relationship between productive assets and production of commodities. The hypothesis is tested in global economic data using static and chain probabilistic graphical model selection. It was found that the hypothesis is supported for a significant number of commodities. The confirmation of the hypothesis establishes that production to assets ratios for commodities are endogenous regulators of production growth.

Comments: 18 Pages.

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Submission history

[v1] 2012-11-18 17:18:57

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