Maintenance costs, obsolescence, and endogenous growth

Koen G. Berden; Charles van Marrewijk

We analyze the impact of obsolescence of economic inventions by incorporating maintenance costsin the endogenous growth model of expanding product varieties. This contrasts with the existingliterature, which ignores maintenance costs and uses the model of quality improvements todescribe obsolescence. If the maintenance costs become too high, the operating profits becomenegative and the firm stops producing the variety. This diminishes the life span of innovations,thus reducing the return on investment in research and development and the growth rate of theeconomy.

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Year of publication:	2001
Authors:	Berden, Koen G. ; Marrewijk, Charles van
Publisher:	Rotterdam [u.a.] : Tinbergen Inst.
Subject:	endogenous growth \| obsolescence \| maintenance \| innovation \| variety \| Theorie \| Theory \| Endogenes Wachstumsmodell \| Endogenous growth model \| Innovation \| Instandhaltung \| Maintenance policy \| Technischer Fortschritt \| Technological change \| Produktlebenszyklus \| Product life cycle

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Extent:	Online-Ressource (25 S.) graph. Darst.
Series:	Discussion paper / Tinbergen Institute. - Rotterdam [u.a.] : [Verlag nicht ermittelbar], ISSN 0929-0834, ZDB-ID 2435783-2. - Vol. 2001,060
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature
Language:	English
Notes:	Systemvoraussetzungen: Acrobat Reader
Other identifiers:	hdl:10419/86078 [Handle]
Classification:	F43 - Economic Growth of Open Economies ; O31 - Innovation and Invention: Processes and Incentives ; O33 - Technological Change: Choices and Consequences; Diffusion Processes ; O41 - One, Two, and Multisector Growth Models
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10011317468