Adjustment Costs

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Adjustment Costs

The costs associated with making any changes. For example, one must consider adjustment costs for hiring a new employee, or the costs of lost production in the event of layoffs. All companies have adjustment costs, especially when they seek to achieve greater efficiency.
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Accumulation of foreign reserves involve two kinds of costs, the adjustment cost and opportunity cost and we cannot say holding utmost level of reserves is helpful for the economy.
Exploiting cross-sectional variations in the CEX data, I estimate the depreciation rate of durable goods and the adjustment cost parameters by the simulated method of moments (SMM).
Thus, adjustment cost should exhibit a positive relationship with bank capital.
The two BSES discoms have, however, conveyed to the Delhi Electricity Regulatory Commission that absence of cost reflective tariff and denial of Power Purchase Adjustment Cost (PPAC) for the past few months have depleted its financial reserves.
Sudhakar told media persons that the Power Purchase Adjustment Cost (PPAC) which is being currently levied at six to eight percent for all consumers will be finished.
Nepra's decision will not be applicable to Peshawar Electric Supply Company (Pesco) since it did not collect the higher fuel adjustment cost because of a stay order it obtained from the Peshawar High Court.
The moderate price adjustment cost model uses a value of [gamma] = 10.
The first sign of fiscal crisis will be a widening of corporate-Treasury yield spreads in a process we call fiscal adjustment cost (FAC) discounting.
The standard errors of the underlying parameters of the model, that is, the adjustment cost parameter, the optimal investment/capital ratio and the market power parameter, (9) are then calculated using the delta method with analytical first derivatives (Oehlert, 1992).
The parameter [kappa] measures the capital adjustment cost: if [kappa] = 0, q is always 1 and there are no adjustment costs.
We now turn to the calibration of the sectoral adjustment cost function.
The adjustment cost of switching strategies can be reduced by avoiding unnecessary switches.