The replacement problem

We construct a vintage capital model of economic growth in which the decision to replace old technologies with new ones is modeled explicitly. Depreciation in this environment is an economic, not a physical concept. We describe the balanced growth paths and the transitional dynamics of this economy. We illustrate the importance of vintage capital by analyzing the response of the economy to fiscal policies designed to stimulate investment in new technologies.

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Year of publication:	1994
Authors:	Cooley, Thomas F. ; Greenwood, Jeremy ; Yorukoglu, Mehmet
Institutions:	Federal Reserve Bank of Minneapolis
Subject:	Economic development

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Extent:	application/pdf
Series:	Discussion Paper / Institute for Empirical Macroeconomics.
Type of publication:	Book / Working Paper
Notes:	Number 95
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005498981