Abstract
The realization of a physical capital stock investment plan can typically be characterized as an investment project that needs a period to be built, consumes (often irreversible) investment expenditures during the whole gestation, and is only useful to the investor when it is complete. Therefore, for the producer, who has to decide on new investment plans, events in a distant future (like product and/or factor markets and technological developments) are important. The irreversibility and non-productiveness during gestation of investment projects that need time-to-build, entail that longer lead times lead to more uncertainty.
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© 1995 Springer-Verlag Berlin Heidelberg
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Peeters, M. (1995). A Closed Form Solution for a Model with Time-to-Build and Adjustment Costs. In: Time-To-Build. Lecture Notes in Economics and Mathematical Systems, vol 420. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-46815-5_4
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DOI: https://doi.org/10.1007/978-3-642-46815-5_4
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-58809-2
Online ISBN: 978-3-642-46815-5
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