DELAYED RESPONSE TO SHOCKS IN THE NEO-AUSTRIAN MODEL: CHARACTERISTICS OF THE TRAVERSE PATH

We analyse the traverse path following either the introduction of a more profitable production technique or a rise in the wage rate on the assumption that investment depends, with a time lag, on the activity level of the economic system. We compare this case with the previously studied cases of an immediate reaction and, the opposite situation, an absence of reaction. We conclude by examining the case in which only some entrepreneurs are innovators.