A macroeconomic disequilibrium model is developed for the Federal
Republic of Germany. Starting with a microeconomic model of firm's
behaviour, the optimal dynamic adjustment of employment and
investment is derived. The model of the firm is complemented by an
explicite aggregation procedure which allows to derive
macroeconomic relations. The model is estimated with macroeconomic
data for the Federal Republic of Germany. An important feature is
the consistent introduction of dynamic adjustment into a model of
the firm. A new method is the particular approach of a delayed
adjustment of employment and investment. The estimation results
show significant underutilizations of labour and capital and
indicate the importance of supply constraints for imports and
exports. As the most prominent result, they reveal the importance
of the slow adjustment of employment and investment for the
macroeconomic situation in Germany and especially for the
persistence of high unemployment in the eighties.
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