We study a small open economy that must implement an emissions reduction plan and eventually phase out fossil fuel. R&D leads to the design of energy saving new machines. Endogenous scrapping eliminates old inefficient machines. We identify two distortions that delay the adoption and diffusion...

We embed the microeconomic decisions associated with investment under uncertainty, capacity utilization, and machine replacement in a general equilibrium model based on putty-clay technology. In the presence of irreversible factor proportions, a mean-preserving spread in the productivity of...

In the current paper we examine the role of forest carbon sequestration benefits in optimal forest management. When carbon benefits are considered not only the forested area is relevant, but also the flow of carbon between land and the atmosphere through the carbon cycle. To account for all...

We study how the timing of technology adoption through capital accumulation shapes firm-level productivity dynamics and quantify its aggregate implications in a model of heterogeneous firms. Using data on the census of incorporated Italian firms and exploiting the lumpiness of capital...

We exploit the information in the successive vintages of gross domestic expenditure (GDE) and gross domestic income (GDI) from the current comprehensive revision to obtain an improved, timely measure of U.S. aggregate output by exploiting cointegration between the different measures and taking...

This paper develops a framework for understanding the modeling challenges posed by the phenomenon of macroeconomic adverse selection, or vintage effects. We develop an econometrically meaningful definitions of vintage and macroeconomic adverse selection and use them to explore issues of model...

We exploit the information in the successive vintages of gross domestic expenditure (GDE) and gross domestic income (GDI) from the current comprehensive revision to obtain an improved, timely measure of U.S. aggregate output by exploiting cointegration between the different measures and taking...

This paper is concerned with the growth of individual earnings over time. Four aspects of time are distinguished: experience, age, vintage and calendar year. The first section of the paper provides a brief outline of a theory of planned growth in earnings. The second and main section of the...

The age structure of capital plays an important role in the measurement of productivity. It has been argued that the slowdown in the 1970's can be ascribed to the aging of the stock of capital. In this paper we incorporate the age structure in productivity measurement. A proposition proves that...

A satisfactory account of the postwar growth experience of the United States should be able to come to terms with the following three facts: 1. Since the early 1970's there has been a slump in the advance of productivity. 2. The price of new equipment has fallen steadily over the postwar period....

This paper develops a dynamic stochastic general equilibrium model with putty-clay technology that incorporates embodied technology, investment irreversibility, and variable capacity utilization. Low short-run capital-labor substitutability native to the putty-clay framework induces the...

We consider a neoclassical interpretation of Germany and Japan's rapid postwar growth that relies on a catch-up mechanism through capital accumulation where technology is embodied in new capital goods. Using a putty-clay model of production and investment, we are able to capture many of the key...

Economic policy makers, international organisations and private-sector forecasters commonly use short-term forecasts of real GDP growth based on monthly indicators, such as industrial production, retail sales and confidence surveys. An assessment of the reliability of such tools and of the...

In stark contrast with liquid asset returns, I find that commercial real estate idiosyncratic return means and variances do not scale with the holding period, even after accounting for all cash flow relevant events. This puzzling phenomenon survives controlling for vintage effects, systematic...

The paper concerns the study of equilibrium points, or steady states, of economic systems arising in modelling optimal investment with vintage capital, namely, systems where all key variables (capitals, investments, prices) are indexed not only by time τ but also by age s. Capital accumulation...

This paper illustrates the use of a real-time data set for forecasting. The data set consists of vintages, or snapshots, of the major macroeconomic data available at quarterly intervals in real time. The paper explains the construction of the data set, examines the properties of several of the...

A home is typically thought of as a bundle of land and structure. Land is supplied inelastically and is non-reproducible. Land values are therefore affected by a number of demand factors. Conceptually, structures are easily produced, and thus are supplied elastically. Under elastic supply, it is...

The standard assumption in growth accounting is that an hour worked by a worker of given type delivers a constant quantity of labor services over time. This assumption may be violated due to vintage effects, which were shown to be important in the United States since the early 1980s, leading to...

This paper extends the Q-theory of investment to capital goods with arbitrary efficiency profiles. Under the assumption of geometric economic depreciation employed by the traditional Q-theory, a firm's replacement cost of assets-in-place is independent of their vintage composition and can be...

This paper explores the route by which aggregate shocks impact vintage capital distribution and aggregate employment by changing the fraction of plants that choose to adjust. Neutral technological shocks increase job reallocation and aggregate employment. The increasing adjustment hazard affects...

We conduct a study dedicated principally to older leveraged buyout funds that have had the opportunity for multiple portfolio company liquidations, or have been fully liquidated. Examining 186 funds in the vintage years from 2000 to 2007 with complete cash flow data from the Preqin database, we...

The work makes two contributions to the literature on dynamic house prices. First, a house price ripple in cycles from Modern to Older dwellings is revealed and, second, as New housing is shown to have lower volatility than the other two. Using spectral analysis, it is argued that there is a 7...

I consider how heterogeneity in capital goods affects international trade patterns, and I show a novel source of comparative advantage: the magnitude of capital goods heterogeneity. Capital goods are heterogeneous in their vintage and productivity, and due to capacity constraints, only...