Teck, Hoon Hian; Phelps, Edmund S. - School of Economics, Singapore Management University - 2006
’ valuation (or Tobin’s Q ratio). There are two cases. If the elasticity of equipment price (pI ) with respect to ICT … causes a decline in firms’ valuation, q per unit, even though Tobin’s Q (= q=pI ) is up. If the elasticity is greater than …’ valuation and Tobin’s Q rise; but then real demand wage falls and employment contracts. The key to generating a booming stock …