Abstract
The paper examines the behaviour of a profit-maximizing firm which forecasts a recession and which has at its disposal to regulate its level of equipment and its level of employment three control variables (investment, recruitment, firing), the selling price being held constant. It shows that (i) the expectation of a recession by a firm is enough to launch a real recession in the demand for production factors (equipment and recruitment); (ii) by comparison with a situation in which the firm may manipulate the selling price, price rigidities imply the occurrence of excess capacity — in addition, they do not allow the firm to delay firing and induce a stronger irregularity in recruitment and firing, and (iii) depending on the characteristics of the firm and of the environment a unique model is compatible with a whole variety of behavioural patterns.
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