ADJUSTMENT COSTS IN FACTOR DEMAND

We thank Georges Bresson, Ricardo Caballero, Ben Craig, Wolter Hassink , Steve Nickell, Patrick Sevestre, Peter Wilcoxen, and participants at seminars at several universities and conferences in North America and Europe, and a number of referees for their comments. Pfann acknowledg es support from the Royal Netherlands Academy of Arts and Sciences (KN AW). Thought suggests, and experience confirms, that such a dogma [tha t a scientific theory is none the worse if its premises are unrealisti c] will be self-indulging, permitting its practitioners to ignore or p lay down inconvenient departures of their theories from the observable real world.